Part 2
Consider the budgetedincome statement for Happy Turtles for the month ended 30 June 2017below:-
                                                  | | | $                  | $ |
Sales                                           Less:  Costof Goods Sold | | |                           | 290,000 |
           Inventory, 31 May 2017 | | | 50,000 | |
           Purchases                       | | |              192,000 | |
           Available for sale            | | |              242,000 | |
           Inventory, 30 June 2017 | | | (40,000) | |
                                                  | | |                           | 202,000 |
Gross profit                                | | |                           | 88,000 |
Less:Â Â Operating expenses
                 Wages                                                                                 36,000
                 Utilities                                                                    5,000
                 Advertising                                                                          10,000
                 Depreciation                                                                          1,000
                 Office expenses                                                       4,000
                 Insurance and property taxes                                                3,000               (59,000)
      Operating profit                                                                                                                        29,000
                                                                                                                            =====
Additionalinformation:
- The cash balance on 31 May 2017 $15,000.
- Sales proceeds are collected as follows: 80% the month of sale;10% the second month; and 10% the third month; explain what % willbe use and why the other % will not be use.
- Accounts receivable are $ 44,000 on 31 May 2017 consisting of $20,000 from April 2017 sales and $24,000 from May 2017 sales, showthe calculation and write process of getting the answer.
- Accounts payable on 31 May 2017 are $ 145,000.
- Happy Turtles pay 25% of purchases during the month of purchaseand the remainder during the following month, what is the month ofpurchase, specify your answers.
- All operating expenses requiring cash are paid during the monthof recognition, except that insurance and property taxes are paidannually in December for the forthcoming year.
- do we put amortization on the cash budget, write thereason.
Required:
Prepare a cash budgetfor June 2017. Confine your analysis to the given data. Ignoreincome taxes.
