A company's budgeted sales and cash payments for merchandise for the next two months follow. July August Budgeted sales $ 33,300 $ 42,300 Budgeted cash payments for merchandise purchases 20,510 17,540 Sales in June are $26,800. Sales are 40% cash and 60% on credit. All credit sales are collected in the month after the sale. The June 30 balance sheet includes $12,600 in cash and $2,100 in loans payable. The company requires a $12,600 minimum cash balance. The company takes loans as needed at month-end to meet this minimum balance. Interest of 1% month (based on the loan balance at the beginning of the month) is paid at each month-end. Preliminary cash balances above $12,600 at each month-end are used to repay any loans. Expenses include office salaries of $5,410 per month, rent of $3,310 per month, sales commissions at 10% of sales dollars, and shipping at 2% of sales dollars; these expenses are paid in the month incurred. Dividends of $1,160 will be paid in August. Prepare a schedule of cash receipts from sales for July and August. And also prepare a cash budget for each of July and August.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A company's budgeted sales and cash payments for merchandise for the next two months follow. July
August Budgeted sales $ 33,300 $ 42,300 Budgeted cash payments for merchandise purchases
20,510 17,540 Sales in June are $26,800. Sales are 40% cash and 60% on credit. All credit sales are
collected in the month after the sale. The June 30 balance sheet includes $12,600 in cash and $2,100 in
loans payable. The company requires a $12,600 minimum cash balance. The company takes loans as
needed at month-end to meet this minimum balance. Interest of 1% month (based on the loan balance
at the beginning of the month) is paid at each month-end. Preliminary cash balances above $12,600 at
each month-end are used to repay any loans. Expenses include office salaries of $5,410 per month, rent
of $3,310 per month, sales commissions at 10% of sales dollars, and shipping at 2% of sales dollars; these
expenses are paid in the month incurred. Dividends of $1,160 will be paid in August. Prepare a schedule
of cash receipts from sales for July and August. And also prepare a cash budget for each of July and
August.
Transcribed Image Text:A company's budgeted sales and cash payments for merchandise for the next two months follow. July August Budgeted sales $ 33,300 $ 42,300 Budgeted cash payments for merchandise purchases 20,510 17,540 Sales in June are $26,800. Sales are 40% cash and 60% on credit. All credit sales are collected in the month after the sale. The June 30 balance sheet includes $12,600 in cash and $2,100 in loans payable. The company requires a $12,600 minimum cash balance. The company takes loans as needed at month-end to meet this minimum balance. Interest of 1% month (based on the loan balance at the beginning of the month) is paid at each month-end. Preliminary cash balances above $12,600 at each month-end are used to repay any loans. Expenses include office salaries of $5,410 per month, rent of $3,310 per month, sales commissions at 10% of sales dollars, and shipping at 2% of sales dollars; these expenses are paid in the month incurred. Dividends of $1,160 will be paid in August. Prepare a schedule of cash receipts from sales for July and August. And also prepare a cash budget for each of July and August.
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