Assignment Week Case 6B
BUS 630 Managerial Accounting

Appendix
Cash Budget for Fourth Quarter
Information based from interim balance sheet dated September 30th. October November December

Begin Cash

Expected Receipts
Cash Sales 826800 868200 911600 *40% paid month Following billing 25% pays same month NO cash discount 30% is collected In second month after billing- Remainder is uncollectible
Accounts Receivable 1012500
Other Renting
Unused warehouse
Space 24000
Total expected Receipts ___________________________________________________________ ------------------------------------------------------------------------------------------------
Expected payments
Sixty percent of all purchases: selling, Administrative, Advertising is paid in month incurred
With the remainder paid in the following month. Ending Inventory is 25 percent of the next months budgeted cost of goods sold. October November December
Equipment 250000
Other such dividends 45000
Accounts Payable 3541555
Other Payables 53200
Raw Materials
Inventories 150388
Other

At a meeting with Mr. Chester and Mr. Wayne to discuss concerns regarding findings in the Cash Budget has left both of them feeling uneasy regarding specific details of the Cash report budget. Accordingly, Mr. Wayne believes that the gross margin perhaps may shrink to 27.5 percent due to higher purchase prices and is also concerned with the impact that this may have on borrowings. This is a logical concern as gross margin shrinks amid higher purchasing prices/costs. As stated in Stewart (1987) Pricing is a crucial but often misunderstood aspect of retailing. Questions about pricing include the relation between margin and markup, the effect of lowering prices,