Budgeting Cash Flow
The following various elements relate to Whitfield, Inc.’s cashbudget for April of the current year. For each item, determine theamount of cash that Whitfield should receive or pay in April.
a. At $28 each, unit sales are 5,000 and 6,000 for March andApril, respectively. Total sales are typically 40% for cash and 60%on credit; 30% of credit sales are collected in the month of sale,with the balance collected in the following month. Uncollectibleaccounts are negligible.
March sales= Answer
April cash sales= Answer
April credit sales= Answer
Cash collected in April =Answer
b. Merchandise purchases were $45,000 and $78,000 for March andApril, respectively. Typically, 20% of total purchases are paid forin the month of purchase with a 5% cash discount. The balance ofpurchases is paid for (without discount) in the followingmonth.
| Marchpurchases | Answer |
| Aprilpurchases | Answer |
| Cash paid in April | Answer |
c. Fixed administrative expenses, which total $11,000 per month,are paid in the month incurred. Variable administrative expensesamount to 20% of total monthly sales revenue, one-half of which ispaid in the month incurred, with the balance paid in the followingmonth.
| April fixed expenses | Answer |
| March variable expenses | Answer |
| April variable expenses | Answer |
| Cash paid in April | Answer |
d. A store asset originally costing $8,000, on which $6,000depreciation has been taken, is sold for cash at a loss of$400.
$Answer
