E-7A. Prepare Cash Budget From Budgeted Transactions Prepare a cash budget for the month ended May...

 

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E-7A. Prepare Cash Budget From Budgeted Transactions Prepare a cash budget for the month ended May 31, 2016. Campton Company anticipates a cash balance of $84,000 on May 1, 2016. The fol- lowing budgeted transactions for May 2016 present data related to anticipated cash receipts and cash disbursements: 1. For May, budgeted cash sales are $60,000 and budgeted credit sales are $500,000. (Credit sales for April were $450,000.) In the month of sale, 40% of credit sales are collected, with the balance collected in the month following sale. 2. Budgeted merchandise purchases for May are $280,000. (Merchandise purchases in April were $240,000.) In the month of purchase, 70% of merchandise purchases are paid for, and the balance is paid for in the following month. 3. Budgeted cash disbursements for salaries and operating expenses for May total $165,000. 4. During May, $25,000 of principal repayment and $4,000 of interest payment are due to the bank. 5. A $20,000 income tax deposit is due to the federal government during May. 6. A new delivery truck will be purchased during May for $6,000 cash and an $8,000 note payable. Depreciation for May will be $500. Prepare a cash budget for Campton Company for the month of May 2016. E-7A. Prepare Cash Budget From Budgeted Transactions Prepare a cash budget for the month ended May 31, 2016. Campton Company anticipates a cash balance of $84,000 on May 1, 2016. The fol- lowing budgeted transactions for May 2016 present data related to anticipated cash receipts and cash disbursements: 1. For May, budgeted cash sales are $60,000 and budgeted credit sales are $500,000. (Credit sales for April were $450,000.) In the month of sale, 40% of credit sales are collected, with the balance collected in the month following sale. 2. Budgeted merchandise purchases for May are $280,000. (Merchandise purchases in April were $240,000.) In the month of purchase, 70% of merchandise purchases are paid for, and the balance is paid for in the following month. 3. Budgeted cash disbursements for salaries and operating expenses for May total $165,000. 4. During May, $25,000 of principal repayment and $4,000 of interest payment are due to the bank. 5. A $20,000 income tax deposit is due to the federal government during May. 6. A new delivery truck will be purchased during May for $6,000 cash and an $8,000 note payable. Depreciation for May will be $500. Prepare a cash budget for Campton Company for the month of May 2016.

Answer rating: 100% (QA)

Step 1 Cash Budget It is the statement which is prepared to estimates the cash receipts and payments ... View the full answer