Cash Disbursements. Eastmark Stores wants to estimate cash disbursements for cash budgeting purposes for the first 3 months of 20X2 from the data given below.
1. Cost of merchandise sold, estimated:
20X1: December $225,000
20X2: January $250,000
February $280,000
March $210,000
The cost of merchandise is to be paid for as follows: 35 percent in the month of sale and 65 percent in the following month.
2. Wages for each month are estimated as follows:
20X1: December $23,000
20X2: January $26,000
February $31,000
March $25,000
All are paid as incurred.
3. Utilities are to be paid every other month at the amount of $320 per month. The first payment is to be made in February
4. Six months’ rent and insurance amounting to a total of $9,700 is to be paid in January.
5. An income tax of $12,500 is to be paid in March.
6. Depreciation on office equipment has been estimated at $7,500 for the year.
7. New equipment costing $50,000 is to be acquired in February, with a down payment of $4,000 required at date of purchase.
8. Other operating expenses have been estimated at $2,250 per month, which are to be paid each month.
Prepare a cash disbursement budget for each of the first 3 months of 20X2.