Question 6 options:

Rounding/Entry Rules:

Round your numerical answers to the nearest DOLLAR.

Do not enter $ or , when entering amounts.

If asked to enter a word or letter, be sure you check the spelling.

Question:

Northern Industries provided the following sales information for the month of March:

	February Actual	March Budget
Cash sales	$ 25,350.00	$ 23,400.00
Credit sales	143,650.00	171,600.00
Total sales	$169,000.00	$195,000.00

For credit sales, the collection pattern is as follows:

Month of sales	40%
Month following sales	56%

Based on past experience, the company estimates the remaining credit sales are uncollectible.

Inventory purchases average 90% of current month's total sales.

Payments for inventory are made as follows:

Month of purchase	20%
Month following purchase	80%

Other expenses are as follows:

Salaries and benefits per month	$ 8,874.00
Rent and insurance per month	$ 3,060.00
Office supplies per month	$ 4,420.00
Payroll tax per quarter to be paid in March	$ 765.00
Depreciation expenses per month	$ 1,275.00

March 1 cash balance is $2,304.00.

Required:

Prepare a cash budget for the month of March and use it to answer the following questions

Cash sales and collections on account for the month are $_____________.

Payments for inventory for the month are $________________.

Payments for all other expenses for the month are $______________.

The ending cash balance at the end of the month is $____________.