Cash budget The following information is budgeted for McCracken Plumbing Supply Company for next quarter: April May June Sales ........................................................... $110,000...



Cash budget


The following information is budgeted for McCracken Plumbing Supply Company for next quarter:



April                May        June


Sales ........................................................... $110,000  $130,000  $180,000


Merchandise purchases .............................. $85,000      $92,000   105,000


Selling and administrative expenses .......... $50,000    $50,000      $50,000


All sales at McCracken are on credit. Forty percent are collected in the month of sale, 58% in the month following the sale, and the remaining 2% are uncollectible.


Merchandise purchases are paid in full the month following the month of purchase.


The selling and administrative expenses above include $8,000 of depreciation on display fixtures and warehouse equipment. All other selling and administrative expenses are paid as incurred. McCracken wants to maintain a cash balance of $15,000. Any amount below this can be borrowed from a local bank as needed in increments of $1,000. All borrowings are made at month end.




Required:


Prepare McCracken's cash budget for the month of May. Use good form. McCracken expects to have $24,000 of cash on hand at the beginning of May.



Jun 09, 2022
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