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    Prepare a Cash Budget for J Car & Sons Company

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    How do I prepare a cash budget? Also, I'd like to demonstrate if the company meets their minimum cash requirement of $10,000.

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    J. Car & Sons Company has gathered the following information:

    April 30 ending cash balance $25,000
    Dividends paid in May $12,000
    Cash expenditures in May for operating expenses $36,800
    Depreciation expense in May $4,500
    Cash collections in May $99,000
    Merchandise purchases paid in cash in May $66,200
    Purchase equipment for cash in May $17,500

    J. Car & Sons Company desires to keep minimum cash balance of $10,000.

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    Solution Preview

    See excel file attached.

    CAR AND SONS COMPANY
    CASH BUDGET FOR THE MONTH OF MAY

    Details Amount
    Cash Receipts
    Beginning cash balance $25,000
    Cash collected from account receivable $99,000 ...

    Solution Summary

    This solution prepares a cash budget including transactions with dividends, cash expenditures, operating expenses, depreciation expense, cash collections, merchandise purchases and equipment purchases. It also explains if the company is meeting their minimum cash requirement in an Excel file.

    $2.19

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