On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company’s sales are made on account. The following information has been provided by Spicer’s management. MonthCredit Sales January$300,000(actual) February 400,000(actual) March 601,000(estimated) April 833,000(estimated) May 800,000(estimated) The company’s collection activity on credit sales historically has been as follows. Collections in the month of the sale50% Collections one month after the sale30 Collections two months after the sale15 Uncollectible accounts5 Spicer’s total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 per month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter. Compute Spicer’s budgeted cash balance at the ends of March, April, and May. MonthCredit Sales January$300,000(actual) February 400,000(actual) March 601,000(estimated) April 833,000(estimated) May 800,000(estimated) The company’s collection activity on credit sales historically has been as follows. Collections in the month of the sale50% Collections one month after the sale30 Collections two months after the sale15 Uncollectible accounts5 Spicer’s total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 per month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter.

 Compute Spicer’s budgeted cash balance at the ends of March, April, and May.

Answer rating: 100% (QA)

Answe r Spicer Corporation Cash Budget for the month of March April and May Parti... View the full answer