1 S P Enterprises needs a cash budget for March The followin

1 S& P Enterprises needs a cash budget for March. The following information is available. s Data January February March 4 Actual January and February and expected March sales: 5 Cash sales 1,600 3,750 5,100 25,00030,00040,000 $ 26.600 33,750 45,100 6 Sales on account 7 Total Sales 9 Accounts Receivable Collections: 10 Month of-sale 11 Month following sale 12 Second month following sale 15% 15 Accounts payable for inventory purchases, March 1 balance $10,500 16 Budgeted inventory purchases in March 17 Inventory payments: 18 Month of purchase 19 Month following purchase 20 60% 21 Total budgeted selling & administrative expenses in March $12,500 $3,200 22 Budgeted selling& administrative depreciation in March Budget Data Schedules and Cash Budget F11 F12 5 6 8 0

Solution

Schedule of expected cash collection for March Cash Sales $5,100.00 January on account sales collection [$25000 *22%] $5,500.00 February on account sales collection [$30000 *60%] $18,000.00 March on account sales collection [$40000 *15%] $6,000.00 Expected Cash collection for March $34,600.00 Schedule of Expected Cash disbursements for Inventory Purchases for March Payment of Accounts Payable (March 1 balance) $10,500.00 Payment of Inventory Purchases in March [$23500 * 60%] $14,100.00 Expected Cash disbursements for Inventory Purchases for March $24,600.00 Cash Budget For March Beginning Cash balance $11,500.00 Add : Cash collection - Sales Collections $34,600.00 Total Cash Available $46,100.00 Less : Cash Disbursements - Cash payments for Inventory Purchases $24,600.00 - Selling and administrative Expenses $9,300.00 - Equipment Purchases $14,000.00 - Dividend paid $2,000.00 Total Cash Disbursements $49,900.00 Cash Surplus / (Deficit) -$3,800.00 Add : Borrowings / (Repayments) $13,800.00 Ending Cash balance $10,000.00