Todd Enterprises is preparing a cash budget for the second quarter of the coming year. The following data have been forecasted: ?April?MaySales ……………………………………………….$150,000?$157,500Merchandise purchases ……………………………107,000?112,400Operating expenses:??? Payroll ………………………………………….13,600?14,280 Advertising …………………………………….5,400?5,700 Rent …………………………………………….2,500?2,500 Depreciation ……………………………………7,500?7,500End of April balances:??? Cash …………………………………………….30,000?? Bank loan payable
………………………………26,000??Additional data:(1) Sales are 40% cash and 60% credit. The collection pattern for credit sales is 50% in the month following the sale and 50% in the month thereafter. Total sales in March were $125,000.(2) Purchases are all on credit, with 40% paid in the month of purchase and 60% paid in the following month.(3) Operating expenses are paid in the month they are incurred.(4) A minimum cash balance of $25,000 is required at the end of each month.(5) Loans are used to maintain the minimum cash balance. At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month. Repayments are made at the end of the month if the cash balance exceeds $25,000.Prepare the company's cash budget for May. Show the ending loan balance at May 31.
What will be an ideal response?
| Todd Enterprises Cash Budget For the Month of May | ||
| Beginning cash balance …………………………… | ? | $ 30,000 |
| Cash receipts from sales (a) ………………………… | ? | 145,500 |
| Total | ? | $175,500 |
| Cash payments: | ? | ? |
| Payments for merchandise (b) ………………… | $109,160 | ? |
| Payroll ………………………………………… | 14,280 | ? |
| Advertising ……………………………………… | 5,700 | ? |
| Rent …………………………………………… | 2,500 | ? |
| Interest ($26,000 ? 1%) ………………………… | 260 | ? |
| Total cash payments …………………………… | ? | $131,900 |
| Preliminary cash balance …………………………… | ? | $ 43,600 |
| Loan repayment …………………………………… | ? | (18,600) |
| Cash balance, ending ……………………………… | ? | $ 25,000 |
| Loan balance, end of month ……………………… | $ 7,400 |
| a. | Cash collections: | ? |
| ? | May cash sales (40% ? $157,500) | $ 63,000 |
| ? | 50% of April credit sales (50% ? 60% ? $150,000) | 45,000 |
| ? | 50% of March credit sales (50% ? 60% ? $125,000) | 37,500 |
| ? | Total cash collections | $145,500 |
| ? | ? | ? |
| b. | Cash payments for purchases: | ? |
| ? | 40% of May purchases (40% ? $112,400) | $ 44,960 |
| ? | 60% of April purchases (60% ? $107,000) | 64,200 |
| ? | Total cash payments for purchases | $109,160 |
You might also like to view...
The ____________________ is the date on which the dividend is actually paid by the corporation
Fill in the blank(s) with correct word
Slicing and dicing permits the disaggregation of data to reveal underlying details
Indicate whether the statement is true or false
Muehlberger Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes.??Fixed Element per MonthVariable Element per Customer Served?Revenue?$4,800?Employee salaries and wages$58,200$1,300?Travel expenses?$500?Other expenses$40,800?A total of 28 customers were actually served during April.Required:Prepare a flexible budget for the actual level of activity for April.
What will be an ideal response?
In the context of tenets of the The European Union Data Protection Directive, ______refers to an individual's right to challenge the accuracy of the data and provide the corrected data
a. enforcement b. security c. correction d. use