Preparation of Cash Budget

question 43

Essay

Preparation of cash budget
Use the following information to prepare a cash budget for Knightsbridge Corporation for the month of June 2015.
In May,30-day credit sales were $175,000; 80% of this amount is estimated to be collectible in June.
June sales are estimated to be $425,000; cash sales are usually 25% of total sales.Only 10% of credit sales are collected in the month in which the sale is made.
Total fixed expenses are $60,000 per month,including $26,000 depreciation.Variable expenses are 55% of sales.All expenses requiring payment are paid in cash when incurred.
A $40,000 note payable must be paid on June 30.
As of May 31,the cash balance is $94,000.

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Definitions:

Zero-Tolerance Policy

A policy that enforces strict punishment for infractions of a stated rule, with the intention of eliminating undesirable behaviors.

Ethical Intensity

The degree of importance or impact that an ethical issue has, based on its potential outcomes and the number of people affected.

Social Security Benefits

Government provided financial benefits given to individuals due to retirement, disability, or death, for the purpose of income support.

Procedural Justice

The fairness of the processes that resolve disputes and allocate resources.