Metahealth Clinic is a medium-sized weight loss business. The Metahealth is currently preparing the master budget for the last 2 months of 2015. All that remains in this process is the cash budget. The following information has been collected from other portions of the master budget and elsewhere.

Prepare a cash budget for each of the last two months of 2015.

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Cash balance on 10/31/2015 Required minimum cash balance Metahealth has a line of credit to drawn on that charges 12% annual All sales are on account 60% of sales are collected in month of the sale 40% of sales are collected in month after the sale All purchases are on account. 25% of purchases are paid in month of the purchase 75% of purchases are paid in month after the purchase October Sales 150.000 Purchases 90.000 Cash paid for salaries 50.000 Cash received from dividends N/A Cash paid for Selling and Admin 35.000 Purchase of computer N/A November 200.000 100.000 50.000 N/A 35.000 2.000 30.000 25.000 December 250.000 50.000 75.000 5,000 35.000 N/A Cash balance on 10/31/2015 Required minimum cash balance Metahealth has a line of credit to drawn on that charges 12% annual All sales are on account 60% of sales are collected in month of the sale 40% of sales are collected in month after the sale All purchases are on account. 25% of purchases are paid in month of the purchase 75% of purchases are paid in month after the purchase October Sales 150.000 Purchases 90.000 Cash paid for salaries 50.000 Cash received from dividends N/A Cash paid for Selling and Admin 35.000 Purchase of computer N/A November 200.000 100.000 50.000 N/A 35.000 2.000 30.000 25.000 December 250.000 50.000 75.000 5,000 35.000 N/A

Answer rating: 100% (QA)

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