How do I prepare a cash budget? Also, I'd like to demonstrate if the company meets their minimum cash requirement of $10,000.
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.
See excel file attached.
CAR AND SONS COMPANY
CASH BUDGET FOR THE MONTH OF MAY
Beginning cash balance $25,000
Cash collected from account receivable $99,000 ...
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.