QUESTION 2 continued... (b) The following information is provided to assist in the preparation of the Cash Budget for TSA Ltd. for June, 2012: The cash balance at 1" June, 2012 is $30,000 . All sales are on credit Actual/Budgeted Budgeted Sales Purchases $ March 140,000 72,000 April 120,000 64,000 May 130,000 68,000 June 155,000 82,000 Cash collections from credit customers are: 70% in the month following the sale 20% in the second month following the sale 10% in the third month following the sale . All purchases are made on credit and payments are made as follows: 60% of purchases are paid for in the month of purchase 40% of purchases are paid for in the month following the purchase. . Selling and administrative expenses each month are $24,000 plus 15% of sales for that month. This includes $6,000 per month for depreciation. . Equipment costing $35,000 is expected to be bought in May and paid for in June. Required: (i) Prepare a schedule of cash collections for the month of June, 2012. (ii) Prepare a cash budget for the month of June, 2012. MAA103/MAAP103: Accounting for Decision Making Sample Exam Paper 1: SOLUTIONS - Kristy Nikas Page 7 of 18