2. ReddingCompanyhasbudgetedsalesrevenuesasfollows:
|
June |
July |
August |
|
|
Creditsales |
135,000 |
145,000 |
90,000 |
|
Cashsales |
90,000 |
255,000 |
195,000 |
|
Totalsales |
225,000 |
400,000 |
285,000 |
Pastexperienceindicatesthat60%ofthecreditsaleswillbecollectedinthemonthofsaleandthe remaining40%willbecollectedinthe followingmonth.Purchasesofinventoryarealloncreditand50% ispaidinthemonthofpurchaseand50%inthemonthfollowingpurchase.Budgetedinventory purchasesare:
|
June |
300,000 |
|
July |
250,000 |
|
August |
105,000 |
Othercashdisbursementsbudgeted:(a)sellingand administrativeexpensesof$48,000 eachmonth,(b)
dividendsof$105,000 willbepaidinJuly,and(c) purchaseofequipmentinAugustfor$30,000 cash. Thecompanywishestomaintainaminimumcashbalanceof$50,000 attheendofeachmonth.
Instructions
PrepareacashbudgetforthemonthsofJulyandAugust.