FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The following information is provided to assist in the preparation of the
- The cash balance at 1 May 2020 is $30,000.
|
|
Budgeted Sales ($) |
Budgeted Purchases ($) |
|
April |
170,000 |
64,000 |
|
May |
140,000 |
68,000 |
- All sales are on cash basis and will be collected in the same month the sale is made.
- All purchases are made on credit and payments are made as follows:
- 60% of purchases are paid for in the month of purchase.
- 40% of purchases are paid for in the month following the purchase.
- The business plans to take out a small business loan of $50,000 at the end of May 2020 and will be repaying it back in July 2020.
- Selling and administrative expenses each month are $45,000.
- The selling and administrative expenses include monthly
depreciation expense of $6,000. - Sales commission is 15% of the total monthly sales, and paid to the staff at the end of every month.
- Equipment costing $35,000 is expected to be bought in May and paid in full with cash.
- The business owner withdraws $10,000 every month.
Required:
Prepare a cash budget for the month of May 2020.
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