Part B: Cash Budgets You have been asked to prepare a cash budget for June and July 2022 for Dragon Limited with the following information:+ 1. Opening cash as of 1st June 2022 is $4,000 in balance. 2. Total expected sales for June are $500,000 and $600,000 for July. The sales for May are $450,000+ 3. Sales are made up of 50% cash and 50% on credit. 4. The receipts for credit sales are: 80% in the same month of sales and the remainder 20% in the following month. 5. Other cash incomes received are: Rent per month $2,500, and interest received at end of July $500. 7. 6. Borrow an additional $47,000 from BNZ in June and use part of the funds to pay $22,000 dividends in July. Bought inventory on credit: $350,000 in June and $460,000 in July. 60% of the payment to supplier in made in the same month of purchase and the remainder 40% in the following month. The inventory purchased in May was $190,000. 8. Cash expenses: Salaries and wages $55,000 per month, rates $4,000 per month, operating expenses of $10,000 for June and $50,000 for July; interest on loan $1,000 for June and $1,400 for July. 9. Purchase of a new equipment in June for $20,000. It has a residual value of $5,000 at the end of 2 years. Depreciate using straight line basis. 10. Sold an old equipment for $5,000 in June. The balance sheet shows the cost of this equipment at $18,000 with an accumulated depreciation of $16,000. + Required: e Prepare the cash budget for June and July 2022 for Dragon Limited and show the closing cash position for these two periods. (
Part B: Cash Budgets You have been asked to prepare a cash budget for June and July 2022 for Dragon Limited with the following information:+ 1. Opening cash as of 1st June 2022 is $4,000 in balance. 2. Total expected sales for June are $500,000 and $600,000 for July. The sales for May are $450,000+ 3. Sales are made up of 50% cash and 50% on credit. 4. The receipts for credit sales are: 80% in the same month of sales and the remainder 20% in the following month. 5. Other cash incomes received are: Rent per month $2,500, and interest received at end of July $500. 7. 6. Borrow an additional $47,000 from BNZ in June and use part of the funds to pay $22,000 dividends in July. Bought inventory on credit: $350,000 in June and $460,000 in July. 60% of the payment to supplier in made in the same month of purchase and the remainder 40% in the following month. The inventory purchased in May was $190,000. 8. Cash expenses: Salaries and wages $55,000 per month, rates $4,000 per month, operating expenses of $10,000 for June and $50,000 for July; interest on loan $1,000 for June and $1,400 for July. 9. Purchase of a new equipment in June for $20,000. It has a residual value of $5,000 at the end of 2 years. Depreciate using straight line basis. 10. Sold an old equipment for $5,000 in June. The balance sheet shows the cost of this equipment at $18,000 with an accumulated depreciation of $16,000. + Required: e Prepare the cash budget for June and July 2022 for Dragon Limited and show the closing cash position for these two periods. (
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 72P: Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for...
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