Question

Short Answer: 1. Preparation of cash budget (5.4 points) Use the following information to prepare a cash budget for Knightsbridge Corporation for the month of June 2012. In May, 30-day credit sales were $175,000; 80% of this amount is estimated to be collectible in June. June sales are estimated to be $425,000; cash sales are usually 25% of total sales. Only 10% of credit sales are collected in the month in which the sale is made. Total fixed expenses are $60,000 per month, including $26,000 depreciation. Variable expenses are 55% of sales. All expenses requiring payment are paid in cash when incurred. A $40,000 note payable must be paid on June 30. As of May 31, the cash balance is $94,000. KNIGHTSBRIDGE CORPORATION Cash Budget For the Month of June 2012 Cash balance at beginning of month. Receipts: Collections from customers: May credit sales June credit sales June cash sales Total cash available. Disbursements: Fixed expenses Variable expenses Note payable Cash balance at end of month 9

          Short Answer:
1. Preparation of cash budget (5.4 points)
Use the following information to prepare a cash budget for Knightsbridge Corporation for the
month of June 2012.
In May, 30-day credit sales were $175,000; 80% of this amount is estimated to be collectible in
June.
June sales are estimated to be $425,000; cash sales are usually 25% of total sales. Only 10% of
credit sales are collected in the month in which the sale is made.
Total fixed expenses are $60,000 per month, including $26,000 depreciation. Variable expenses
are 55% of sales. All expenses requiring payment are paid in cash when incurred.
A $40,000 note payable must be paid on June 30.
As of May 31, the cash balance is $94,000.
KNIGHTSBRIDGE CORPORATION
Cash Budget
For the Month of June 2012
Cash balance at beginning of month.
Receipts:
Collections from customers:
May credit sales
June credit sales
June cash sales
Total cash available.
Disbursements:
Fixed expenses
Variable expenses
Note payable
Cash balance at end of month
9

Short Answer:
1. Preparation of cash budget (5.4 points)
Use the following information to prepare a cash budget for Knightsbridge Corporation for the
month of June 2012.
In May, 30-day credit sales were 175,000; 80% of this amount is estimated to be collectible in
June.
June sales are estimated to be425,000; cash sales are usually 25% of total sales. Only 10% of
credit sales are collected in the month in which the sale is made.
Total fixed expenses are 60,000 per month, including26,000 depreciation. Variable expenses
are 55% of sales. All expenses requiring payment are paid in cash when incurred.
A 40,000 note payable must be paid on June 30.
As of May 31, the cash balance is94,000.
KNIGHTSBRIDGE CORPORATION
Cash Budget
For the Month of June 2012
Cash balance at beginning of month.
Receipts:
Collections from customers:
May credit sales
June credit sales
June cash sales
Total cash available.
Disbursements:
Fixed expenses
Variable expenses
Note payable
Cash balance at end of month
9

Added by Michelle C.

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