(Profit Budget and Cash Forecast) Creassos Ltd. was formed in July 2012 with $20,000 of capital. $7,500 of this was used to purchase equipment. The owner budgeted for the following:
|
Sales |
Receipts of Accounts Receivable |
Purchases |
Payments on Accounts Payable |
Wages |
Other Expenses |
|
|
July |
$20,000 |
– |
$ 8,000 |
$ 5,000 |
$3,000 |
$2,000 |
|
30,000 |
$20,000 |
15,000 |
10,000 |
4,000 |
2,000 |
|
|
40,000 |
30,000 |
20,000 |
20,000 |
5,000 |
3,000 |
Wages and other expenses are paid in cash. In addition to the above, depreciation is $2,400 per year. No inventory is held by the company.
- Calculate the profit for each of the three months from July through September and the total profit for the three months.
- Calculate the cash balance at the end of each month.
- Prepare a statement of financial position at the end of September.