Solution-Prepare mccrackens cash budget for the month

Prepare mccrackens cash budget for the month

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Reference no: EM13518976

The following information is budgeted for McCracken Plumbing Supply Company for next quarter:

	April	May	June
Sales	$110,000	$130,000	$180,000
Merchandise purchases	$85,000	$92,000	$105,000
Selling and administrative expenses	$50,000	$50,000	$50,000

All sales at McCracken are on credit. Forty percent are collected in the month of sale, 58% in the month following the sale, and the remaining 2% are uncollectible. Merchandise purchases are paid in full the month following the month of purchase. The selling and administrative expenses above include $8,000 of depreciation on display fixtures and warehouse equipment. All other selling and administrative expenses are paid as incurred. McCracken wants to maintain a cash balance of $15,000. Any amount below this can be borrowed from a local bank as needed in increments of $1,000. All borrowings are made at month end.

Required:

Prepare McCracken's cash budget for the month of May. Use good form. McCracken expects to have $24,000 of cash on hand at the beginning of May.

Reference no: EM13518976

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Prepare mccrackens cash budget for the month

Reference no: EM13518976

Reference no: EM13518976

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