P21-22A Preparing a financial budget
Refer to P21-21A. Clipboard Office Supply's sales are 75% cash and 25% credit. (Use the rounded sales values) Credit sales are collected in the month of purchase and 75% the following month. Salaries and sales commissions are also paid half in the month earned and half the next month. Income tax is paid at the end of the year.
The April 30, 2011 balance sheet showed the following balances:
Cash $25,000
Accounts payable 53,000
Salaries and commission payable 2,500
Requirements:
1. Prepare schedules of (a) budgeted cash collections, (b) budgeted cash payments for purchases, and (c) budgeted cash payments for operating expenses. Show amounts for each month and totals for May and June. Round your computations to the nearest dollar.
2. Prepare a cash budget. If no financing activity took place, what is the budgeted cash balance on June 30, 2011?
Click here for the solution: Refer to P21-21A. Clipboard Office Supply's sales are 75% cash and 25% credit
