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The owner of a small mining supply company has requested a cash budget for June. pr requi deve After examining the records or the company, you find the following: udget a. Cash balance on June 1 is $345. b. Actual sales for April and May are April Мay Cash sales Credit sales Total sales $ 10,000 25,000 $35,000 $15,000 25,000 $40,000 c. Credit sales are collected over a three-month period: 50 percent in the month of sale, 30 percent in the second month, and 15 percent in the third month. The sales collected in the third month are subject to a 1.5 percent late fee, but only half of the affected customers pay the late fee, and the owner does not think it is worth his while to try to collect from the other half. The remaining sales are R uncollectible. d. Inventory purchases average 60 percent of a month's total sales. Of those pur- chases, 40 percent are paid for in the month of purchase. The remaining 60 cent are paid for in the following month. e. Salaries and wages total $8,700 a month, including a $4,500 salary paid to the per- owner. f. Rent is $1,200 per month. g. Taxes to be paid in June are $5,500. The owner also tells you that he expects cash sales of $20,000 and credit sales of $30,000 for June. There is no minimum cash balance required. The owner of the company does not have access to short-term loans. Required

The owner of a small mining supply company has requested a cash budget for June. pr requi deve After examining the records or the company, you find the following: udget a. Cash balance on June 1 is $345. b. Actual sales for April and May are April Мay Cash sales Credit sales Total sales $ 10,000 25,000 $35,000 $15,000 25,000 $40,000 c. Credit sales are collected over a three-month period: 50 percent in the month of sale, 30 percent in the second month, and 15 percent in the third month. The sales collected in the third month are subject to a 1.5 percent late fee, but only half of the affected customers pay the late fee, and the owner does not think it is worth his while to try to collect from the other half. The remaining sales are R uncollectible. d. Inventory purchases average 60 percent of a month's total sales. Of those pur- chases, 40 percent are paid for in the month of purchase. The remaining 60 cent are paid for in the following month. e. Salaries and wages total $8,700 a month, including a $4,500 salary paid to the per- owner. f. Rent is $1,200 per month. g. Taxes to be paid in June are $5,500. The owner also tells you that he expects cash sales of $20,000 and credit sales of $30,000 for June. There is no minimum cash balance required. The owner of the company does not have access to short-term loans. Required

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
Section: Chapter Questions
Problem 20E
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Prepare a schedule of 15 The owner of a small mining supply company has requested a cash budget é After examining the records or the company, you find the following: ch Budget ust. a. Cash balance on June 1 is $345. b. Actual sales for April and May are requires develope Overh prod April Мay Cash sales Credit sales Mai $ 10,000 25,000 $35,000 Pov $15,000 25,000 Inc Re Total sales $40,000 c. Credit sales are collected over a three-month period: 50 percent in the month of sale, 30 percent in the second month, and 15 percent in the third month. The sales collected in the third month are subject to a 1.5 percent late fee, but only half of the affected customers pay the late fee, and the owner does not think it ie worth his while to try to collect from the other half. The remaining sales are Requ 1. L 2. uncollectible. d. Inventory purchases average 60 percent of a month's total sales. Of those pur- chases, 40 percent are paid for in the month of purchase. The remaining 60 per- cent are paid for in the following month. e. Salaries and wages total $8,700 a month, including a $4,500 salary paid to the Re owner. du f. Rent is $1,200 per month. g. Taxes to be paid in June are $5,500. in The owner also tells you that he expects cash sales of $20,000 and credit sales of $30,000 for June. There is no minimum cash balance required. The owner of the company does not have access to short-term loans. Required
Transcribed Image Text:Prepare a schedule of 15 The owner of a small mining supply company has requested a cash budget é After examining the records or the company, you find the following: ch Budget ust. a. Cash balance on June 1 is $345. b. Actual sales for April and May are requires develope Overh prod April Мay Cash sales Credit sales Mai $ 10,000 25,000 $35,000 Pov $15,000 25,000 Inc Re Total sales $40,000 c. Credit sales are collected over a three-month period: 50 percent in the month of sale, 30 percent in the second month, and 15 percent in the third month. The sales collected in the third month are subject to a 1.5 percent late fee, but only half of the affected customers pay the late fee, and the owner does not think it ie worth his while to try to collect from the other half. The remaining sales are Requ 1. L 2. uncollectible. d. Inventory purchases average 60 percent of a month's total sales. Of those pur- chases, 40 percent are paid for in the month of purchase. The remaining 60 per- cent are paid for in the following month. e. Salaries and wages total $8,700 a month, including a $4,500 salary paid to the Re owner. du f. Rent is $1,200 per month. g. Taxes to be paid in June are $5,500. in The owner also tells you that he expects cash sales of $20,000 and credit sales of $30,000 for June. There is no minimum cash balance required. The owner of the company does not have access to short-term loans. Required
Prepare a sc 8-15 The owner of a emall minin of Cash Pudg LOZ is $345. a. Ceh balance on June b Actual enles for April and April May are EXCEL $ 10,000 25.000 $35.000 Мay CRsh sales Credit sales Total sales $15,000 25,000 %2440,000 overhea Maintenanc Power Indirect labor sales collected in the third Rent month are subject to a 1.5 percent late fee, but Required uncollectible. only chases, 40 percent are par 1or in the month of purchase. The remaining cent are paid for in the following month. e Salaries and wages total 20,700 a month, including a $4,500 salary paid to a than expected a Refer to the info duced 120,00o incurred were Owner. f. Rent is $1,200 per month. g. Taxes to be paid in June are $5,500. The owner also tells you that ne expects cash sales of $20,000 and credit sales of $30,000 for June. There is no minimum cash balance required. The owner of the company does not have access to short-term loans. per- Maintenance Power Indirect lab Required Rent 1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. 2. Did the business show a negative cash balance for June? Assuming that the owner has no hope of establishing a line of credit for the business, what recom- mendations would you give the owner for dealing with a negative cash balance? Required 1. Prep 2. Bas Ca An The ba
Transcribed Image Text:Prepare a sc 8-15 The owner of a emall minin of Cash Pudg LOZ is $345. a. Ceh balance on June b Actual enles for April and April May are EXCEL $ 10,000 25.000 $35.000 Мay CRsh sales Credit sales Total sales $15,000 25,000 %2440,000 overhea Maintenanc Power Indirect labor sales collected in the third Rent month are subject to a 1.5 percent late fee, but Required uncollectible. only chases, 40 percent are par 1or in the month of purchase. The remaining cent are paid for in the following month. e Salaries and wages total 20,700 a month, including a $4,500 salary paid to a than expected a Refer to the info duced 120,00o incurred were Owner. f. Rent is $1,200 per month. g. Taxes to be paid in June are $5,500. The owner also tells you that ne expects cash sales of $20,000 and credit sales of $30,000 for June. There is no minimum cash balance required. The owner of the company does not have access to short-term loans. per- Maintenance Power Indirect lab Required Rent 1. Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. 2. Did the business show a negative cash balance for June? Assuming that the owner has no hope of establishing a line of credit for the business, what recom- mendations would you give the owner for dealing with a negative cash balance? Required 1. Prep 2. Bas Ca An The ba
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