The following information is budgeted for McCracken Plumbing Supply Corporation for next quarter: All sales at McCracken
Question:
The following information is budgeted for McCracken Plumbing Supply Corporation for next quarter:
All sales at McCracken are on credit.
Forty percent are collected in the month of sale, 58% in the month following the sale, and the remaining 2% are uncollectible. Merchandise purchases are paid in full the month following the month of purchase. The selling and administrative expenses above include $8,000 of depreciation on display fixtures and warehouse equipment. All other selling and administrative expenses are paid as incurred. McCracken wants to maintain a cash balance of $15,000. Any amount below this can be borrowed from a local bank as needed in increments of $1,000. All borrowings are made at month end.
Required:
Prepare McCracken's cash budget for May. McCracken expects to have $24,000 of cash on hand at the beginning of May.
Advanced Accounting
ISBN: 9780132568968
11th Edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith