Question

Cash Budget The Peoria Supply Company sells for $30 one productthat it purchases for $20. Budgeted sales in total dollars for nextyear are $720,000. The sales information needed for preparing theJuly budget follows: Month Sales Revenue May $30,000 June 43,000July 48,000 August 50,000 Account balances at July 1 include these:Cash $20,000 Merchandise inventory 17,000 Accounts receivable(sales) 22,000 Accounts payable (purchases) 14,000 The company paysfor one-half of its purchases in the month of purchase and theremainder in the following month. End-of-month inventory must be 50percent of the budgeted sales in units for the next month. A 2percent cash discount on sales is allowed if payment is made duringthe month of sale. Experience indicates that 50 percent of thebillings will be collected during the month of sale, 40 percent inthe following month, 7 percent in the second following month, and 3percent will be uncollectible. Total budgeted selling andadministrative expenses (excluding bad debts) for the fiscal yearare estimated at $192,000 , of which one-half is fixed expense(inclusive of a $20,000 annual depreciation charge). Fixed expensesare incurred evenly during the year. The other selling andadministrative expenses vary with sales. Expenses are paid duringthe month incurred. (Round your answers to the nearest wholenumber.) (a) Prepare a schedule of estimated cash collections forJuly. Peoria Supply Company Schedule of Cash Collections For theMonth of July Current month's sales $Answer Previous month's sales$Answer Two months' prior sales $Answer Total cash collections$Answer (b) Prepare a schedule of estimated July cash payments forpurchases. Peoria Supply Company Schedule of Cash Payments forPurchases For the Month of July Current month's purchases $AnswerBeginning accounts payable Answer Total cash payments $Answer (c)Prepare schedules of July selling and administrative expenses,separately identifying those requiring cash disbursements. PeoriaSupply Company Schedule of Selling and Administrative Expenses andCash Disbursements For the Month of July Total Cash Selling andadministrative expenses: Fixed $Answer Cash payment $AnswerVariable Answer Answer Total expenses and cash disbursements$Answer $Answer (d) Prepare a cash budget in summary form for July.Peoria Supply Company Cash Budget For the Month of July Cashreceipts $Answer Cash disbursements: Merchandise $Answer Sellingand administrative Answer Answer Excess receipts (disbursements)$Answer