Avery Inc.would like to prepare a summary cash budget for June.The following information is available:
?The cash balance at 1 June was estimated to be $ \$ 6000 $.
?June sales, all on account, were estimated to be $ \$ 75000 $. Sales are collected over a two-month period with 60 per cent collected in the month of sale and the remainder in the subsequent month. May sales on account were $ \$ 70000 $.
?Inventory purchases are expected to be $ \$ 50000 $ in June. The company pays for one-half of inventory purchases in the month of purchase and the remainder in the subsequent month. May purchases were $ \$ 60000 $.
?Cash disbursements for selling and administrative expenses are expected to be $ \$ 9000 $ in June.
?Depreciation expense for June is expected to be $ \$ 3000 $.

What is the cash balance at the end of June expected to be?
A) $15 000
B) $12 000
C) $26 000
D) $29 000

Question

Avery Inc.would like to prepare a summary cash budget for June.The following information is available:
?The cash balance at 1 June was estimated to be $ \$ 6000 $.
?June sales, all on account, were estimated to be $ \$ 75000 $. Sales are collected over a two-month period with 60 per cent collected in the month of sale and the remainder in the subsequent month. May sales on account were $ \$ 70000 $.
?Inventory purchases are expected to be $ \$ 50000 $ in June. The company pays for one-half of inventory purchases in the month of purchase and the remainder in the subsequent month. May purchases were $ \$ 60000 $.
?Cash disbursements for selling and administrative expenses are expected to be $ \$ 9000 $ in June.
?Depreciation expense for June is expected to be $ \$ 3000 $.

What is the cash balance at the end of June expected to be?
A) $15 000
B) $12 000
C) $26 000
D) $29 000

Quizplus · Accepted Answer

Explanation:Cash balance at 1 June

Avery IncWould Like to Prepare a Summary Cash Budget for June