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Cash budget

Catherine O'Shea is the manager of an extremely successful gift shop, Kate's Gifts, which is operates for the benefit of local charities. From the data below, she wants a cash budget showing expected cash receipts and disbursements for the month of April, and the cash balance expected as of April 30, 2003:

? Bank note due April 10: $90,000 plus $4,500 interest
? Amortization for April: $2,500
? Two-year insurance policy due April 14 for renewal: $1,500, to be
paid in cash
? Planned cash balance, March 31,2003: $500,000, 40 percent paid in
month of purchase, 60 percent paid in next month
? Customer recievables as of March 31: $60,000 from February sales,
$450,000 from March sales
? Payrolls due in April: $90,000
? Other expenses for April: $45,000
? Accrues taxes fro April, payable in June: $7,500
? Sales for April: $1,000,000, half collected in month of sale, 40 percent
in next month, 10 percent in third month
? Accounts payable, March 31,2003: $460,000

Prepare a cash budget.

Solution Preview

Catherine O'Shea is the manager of an extremely successful gift shop, Kate's Gifts, which is operates for the benefit of local charities. From the data below, she wants a cash budget showing expected cash receipts and disbursements for the month of April, and the cash balance ...

Solution Summary

This provides the steps to prepare cash budget

$2.19