Wilsons retail company is planning a cash budget for the


Question - Cash Budget

Wilson's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows:

Month

Sales Revenue

Month

Sales Revenue

January

$300,000

March

$200,000

February

245,000

April

155,000

All sales are on credit; 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 70 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total 540,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $30,000.

Prepare monthly cash budgets for February, March, and April.

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