ACCT504 Sample Case Study 3 on Cash Budgeting Solution

It is recommended that you share this solution file in Doc Sharing by the end of Week 5 with your students.

The Cambridge Company has budgeted sales revenues as follows:

   Jan          Feb              Mar

Credit sales 45,000 36,000 27,000 Cash sales 27,000 76,500 58,500 Total sales 72,000 112,500 85,500

Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month.

Purchases of inventory are all on credit and 40% is paid in the month of purchase and 60% in the month following purchase. Budgeted inventory purchases are 97,500 in January, 67,500 in February, and 31,500 in March.

Other budgeted cash receipts: (a) sale...