Sleepy Night Inc is a Bedding retailer. The following relates to their projected sales for the next
Question:
Sleepy Night Inc is a Bedding retailer.
The following relates to their projected sales for the next quarter
April | May | June | |
Cash Sales | 30000 | 35000 | 65000 |
Credit Sales | 42000 | 39000 | 45000 |
Purchases | 55000 | 50000 | 45000 |
Cost of Sales | 35000 | 40000 | 50000 |
Rent | 15000 | 15000 | 15000 |
Wages & Salaries | 12000 | 12000 | 12000 |
Depreciation | 5000 | 5000 | 5000 |
Utilities | 2500 | 2500 | 2500 |
Sleepy Night’s Credit sales were $30000 in February and $36000 in March. Based on historical experience, Sleepy Night usually receives 50% of their credit sales in the month of purchase, 30% in the month following the purchase and 20% in the second month after purchase. All purchases are on credit and paid for in the month of purchase. In June, the company plans to buy a new computer system for their office for $8000. They will also sell their existing computer for $1000 that month. At the beginning of the quarter, there was an unpaid utilities bill for $300 which will need to be paid in April. At the end of March, Sleepy Night had $20000 in the bank.
Required:
- 1.Prepare the schedule of receipts for Sleepy Night
- 2.Prepare the Cash Budget for Sleepy Night
Intermediate Financial Management
ISBN: 978-1111530266
11th edition
Authors: Eugene F. Brigham, Phillip R. Daves