50.1K

Verified Solution

Link Copied!

Cruises, Inc. has budgeted saies revenues as follows: Past experience indicates that 60% of the credit sales wils be collected in the month of sale and the remaining 40x will be collected in the following month. Purchases of imventory are all on credit and 50% is paid in the month of purchase and 50% in the month following purchase, Budgeted inventory purchases are: Other cash distursements budgeted: (a) selling and administrative expenses of $46,000 each month, (b) dividends of 3103,000 will be paid in July, and (c) purchase of equipment in August for 530,000cash The company wishes to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the: bank at 6% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excses cash balance. The beginning cash batance on July 1 was 550.000 . Ascume that borrowed money in this case is for one month Prepare a cash budget for the manthe in finha and h. Schedule of Expected Collections from Customers Credit sales July August June 5. 5 July August Totalcoliections 5 Schefule af Expected Pavments for Purchasus of linsentocx inventory purchaies July Aucust June 5 3 July Augist Total bavinents Sontrien Artempts: 0 of 1 used

Answer & Explanation Solved by verified expert

See Answer