Question:
(Profit Budget and Cash Forecast) Creassos Ltd. was formed in July 2012 with $20,000 of capital. $7,500 of this was used to purchase equipment. The owner budgeted for the following:
|
Sales
|
Receipts of
Accounts Receivable
|
Purchases
|
Payments on Accounts Payable
|
Wages
|
Other Expenses
|
|
July
|
$20,000
|
-
|
$ 8,000
|
$ 5,000
|
$3,000
|
$2,000
|
|
30,000
|
$20,000
|
15,000
|
10,000
|
4,000
|
2,000
|
|
40,000
|
30,000
|
20,000
|
20,000
|
5,000
|
3,000
|
Wages and other expenses are paid in cash. In addition to the above, depreciation is $2,400 per year. No inventory is held by the company.
1. Calculate the profit for each of the three months from July through September and the total profit for the three months.
2. Calculate the cash balance at the end of each month.
3. Prepare a statement of financial position at the end of September.