Posted: April 26th, 2016

How to prepare a cash receipt?

Using the data above, complete the following statements and schedules for the first quarter:

a Schedule of Expected Cash Collections:
January February March Quarter
Cash sales $80,000
Credit sales $224,000
Total Collections $304,000

b Merchandise purchases budget:

Merchandise Purchases Budget
January February March Quarter
Budgeted Cost of Goods Sold $240,000* $360,000
Add desired ending inventory $90,000**
Total needs $330,000
Less beginning inventory $60,000
Required purchases $270,000

*$400,000 sales x 60% cost ratio = $240,000
** $360,000 x 25% = $90,000

c Schedule of Expected Cash Disbursements-Merchandise Purchases
January February March Quarter
December purchases $93,000 $93,000
January purchases $135,000 $135,000 $270,000
February purchases
March purchases
Total disbursements $228,000

d Complete the following schedule:

Schedule of Expected Cash Disbursements-Selling and Administrative Expenses
January February March Quarter
Salaries and wages $27,000
Advertising $70,000
Shipping $20,000
Other expenses $12,000
Total disbursements $129,000

e Complete the following cash budget:

Cash Budget
January February March Quarter
Cash balance, beginning $48,000
Add cash collections $304,000
Total cash available $352,000
Less cash disbursements
For inventory $228,000
For selling and admin expenses $129,000
For purchase of equipment ——
For cash dividends $45,000
Total cash disbursements $402,000
Excess (deficiency) of cash ($50,000)
Financing needed
Cash balance, ending

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