Heidi Pedersen, the treasurer for Wood Products, Inc., has just been asked by Justin Wood, the company's president, to prepare a memo detailing the company's ending cash balance for the next three months. Below, you will see the relevant estimates for this period.
| Credit sales |
$1,275,800 |
$1,483,500 |
$1,096,300 |
| Credit purchases |
765,480 |
890,160 |
657,780 |
| Cash disbursements |
|
|
|
| Wages, taxes, and expenses |
348,600 |
395,620 |
337,150 |
| Interest |
29,900 |
29,900 |
29,900 |
| Equipment |
0 |
158,900 |
96,300 |
| Credit sales collections |
|
|
|
| Collected in month of sale |
35% |
|
|
| Collected month after sale |
60% |
|
|
| Never collected |
5% |
|
|
| June credit sales |
$1,135,020 |
|
|
| June credit purchases |
$ 681,012 |
|
|
| Beginning cash balance |
$ 425,000 |
|
|
All credit purchases are paid in the month after the purchase.
- Complete the cash budget for Wood Products for the next three months.
- Heidi knows that the cash budget will become a standard report completed before each quarter. To help reduce the time preparing the report each quarter, she would like a memo with the appropriate information in Excel linked to the memo. Prepare a memo to Justin that will automatically update when the values are changed in Excel