Question

11. Calculating the Cash Budget Here are some important figures from the budget of Cornell, Inc., for the second quarter of 2017:

	APRIL	MAY	JUNE
Credit sales	$434,000	$510,000	$538,500
Credit purchases	210,800	278,300	286,700
Cash disbursements
Wages, taxes, and expenses	62,700	78,500	95,100
Interest	15,100	15,100	15,100
Equipment purchases	127,800	148,400	—

page 577The company predicts that 5 percent of its credit sales will never be collected, 35 percent of its sales will be collected in the month of the sale, and the remaining 60 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase.

In March 2017, credit sales were $419,000 and credit purchases were $206,300. Using this information, complete the following cash budget:

	APRIL	MAY	JUNE
Beginning cash balance	$265,000
Cash receipts
Cash collections from credit sales
Total cash available
Cash disbursements
Purchases
Wages, taxes, and expenses
Interest
Equipment purchases
Total cash disbursements
Ending cash balance

Answer 1