Reference no: EM131288729

The Blix Company makes and sells a product called Blix Bars. Below are the units to be sold and the selling price per unit. Calculate the total sales for Quarter 1: January February March Units to be sold 30,000 20,000 50,000 Selling Price per unit $5 $5 $5 Total Sales Prepare the cash collections budget based on the following information: 25% of the company's sales are for cash and 75% are on account. Collections for sales on account follow a stable pattern as follows: 50% of a month's credit sales are collected in the month of sale, 30% are collected in the month following sale, and 20% are collected in the second month following sale. The remainder are uncollectible. CASH COLLECTIONS BUDGET January February March Cash Sales for the month January Credit Sales February credit sales March Credit Sales Total Cash Collections Calculate purchases for each month based on the 10% of sales units at $50 per unit cost. Based on total purchases, calculate disbursements for each month based on the following breakdown: 40% of purchases are paid for in cash at the time of purchase, 30% are paid for in the following month and the remaining 30% is paid in the 2nd month after the purchase. PAYMENTS MADE FOR INVENTORY PURCHASES BUDGET January February March Units to be Purchased Purchases for the Month Disbursements for Inventory Purchases: January Disbursements February Disbursements March Disbursements Total Disbursements for Inventory Purchases Complete the cash budget with the following information: The beginning cash balance was $125,000 Employee wages are paid in cash each month and amount to 20% of sales for the month in which the sales occur. Advertising Expense – 5% of sales per month Insurance Expense – 40,000 per month Rent Expense - 10,000 per month. Office Furniture Purchases – 15,000 in January If necessary, the company will borrow cash from a bank. The Company must maintain a minimum cash balance of $5,000. In case of a deficiency, a loan is obtained at 8% interest rate where the interest is repaid on the first day of following month. January February March Beginning Cash Balance Cash Collections Total Cash Available Less Disbursements: Inventory Purchases Employee Wages Advertising Expense Insurance Expense Rent Expense Office Furniture Purchases Total Disbursements Excess or Deficiency of Cash Financing Loans Taken Loans Paid Back Cash Available Interest Expense for the Month (8%) Ending Cash Balance