The following information is available from the controller's records for Penelope,Ltd.:
$$\begin{array} { l c r }
& \text { Sales } & \text { Purchases } \
\text { May } & \$ 60,000 & \$ 20,000 \
\text { June } & 70,000 & 30,000 \
\text { July } & 80,000 & 25,000 \
\end{array}$$
All sales are on credit.Records show that 80 percent of the customers pay during the month of the sale,15 percent pay the month after the sale,and the remaining 5 percent pay the second month after the sale.Purchases are all paid the following month at a 1 percent discount.Cash disbursements for operating expenses in July were $8,000.
Prepare a cash budget for July.

Question

The following information is available from the controller's records for Penelope,Ltd.:
 $$\begin{array} { l c r } 
& \text { Sales } & \text { Purchases } \
\text { May } & \$ 60,000 & \$ 20,000 \
\text { June } & 70,000 & 30,000 \
\text { July } & 80,000 & 25,000 \
\end{array}$$ 
All sales are on credit.Records show that 80 percent of the customers pay during the month of the sale,15 percent pay the month after the sale,and the remaining 5 percent pay the second month after the sale.Purchases are all paid the following month at a 1 percent discount.Cash disbursements for operating expenses in July were $8,000.
Prepare a cash budget for July.

Quizplus · Accepted Answer

The Answer of The following information is available from the controller's records for Penelope,Ltd.:
 $$\begin{array} { l c r } 
& \text { Sales } & \text { Purchases } \
\text { May } & \$ 60,000 & \$ 20,000 \
\text { June } & 70,000 & 30,000 \
\text { July } & 80,000 & 25,000 \
\end{array}$$ 
All sales are on credit.Records show that 80 percent of the customers pay during the month of the sale,15 percent pay the month after the sale,and the remaining 5 percent pay the second month after the sale.Purchases are all paid the following month at a 1 percent discount.Cash disbursements for operating expenses in July were $8,000.
Prepare a cash budget for July.

The Following Information Is Available from the Controller's Records for Penelope,Ltd