1. On April 1, the start of the loan period, the cash balance is $26,000. Accounts Receivable on April 1 will total $151,500, of which, $141,000 will be collected durin April and $72,000 will be collected in May with the balance uncollectible.
2. Past experience shows that 20% of a months sales are collected in the month of sale, 75% in the next month and 4% in the second month following the sale. The balance is considered uncollectible. Budgeted sales and expenses are:
April May June
Sales in Units sold for $10.00 20,000 30,000 25,000
Sales 200,000 300,000 250,000
Merchandise Purchases 120,000 180,000 150,000
Payroll 9,000 9,000 8,000
Lease Payments 15,000 15,000 15,000
Advertising 70,000 80,000 60,000
Equipment 8,000 0 0
Depreciation 10,000 10,000 10,000

3. Merchandise purchases are paid in full during the month following the purchase. Accounts Payable for merchandise on April 1, which will be paid in April is $108,000.

4. In preparing the budget, assume the $30,000 will be made in April and repaid in June. Interest on the note is 16% and is paid at maturity date.

1. On April 1, the start of the loan period, the cash balance is $26,000. Accounts Receivable on April 1 will total $151,500, of which, $141,000 will be collected durin April and $72,000 will be collected in May with the balance uncollectible.
2. Past experience shows that 20% of a months sales are collected in the month of sale, 75% in the next month and 4% in the second month following the sale. The balance is considered uncollectible. Budgeted sales and expenses are:
April May June
Sales in Units sold for $10.00 20,000 30,000 25,000
Sales 200,000 300,000 250,000
Merchandise Purchases 120,000 180,000 150,000
Payroll 9,000 9,000 8,000
Lease Payments 15,000 15,000 15,000
Advertising 70,000 80,000 60,000
Equipment 8,000 0 0
Depreciation 10,000 10,000 10,000

3. Merchandise purchases are paid in full during the month following the purchase. Accounts Payable for merchandise on April 1, which will be paid in April is $108,000.

4. In preparing the budget, assume the $30,000 will be made in April and repaid in June. Interest on the note is 16% and is paid at maturity date.

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