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Cash Budget

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Sales for July, August, and September are expected to be $100,000, $90,000, and $110,000, respectively, for Belluci Company. All sales are on account (terms 2/15, net 30 days) and are collected 50 percent in the month of the sale and 50 percent in the following month. One-half of all sales discounts are taken on the average. Raw materials are purchased one month before being needed, and all purchases and expenses are paid for as incurred. Activities for the quarter are expected to be:

July August September
Raw materials used $20,000 $18,000 $22,000
Salaries 35,000 34,000 46,000
Maintenance and repairs 9,000 9,000 9,000
Depreciation 18,000 18,000 18,000
Utilities and other 7,000 7,000 7,500
Dividends paid -0- 5,000 -0-
Payment on bonds 4,000 4,000 4,000

Required: Using the given information, prepare a cash budget for August.

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The solution explains how to prepare a cash budget for Belluci Company

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Belluci Company
Cash Budget for August

Cash Collection
Sales in August (50%) 45,000 50% of August sales are collected in Aug
Sales of ...

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