1. Cash Collected
2. Costs
a) Budgeted expenditures for May
Inventory Purchases 8700
Rent, utilities, etc 2800
Wages 2000
Total 13500
Yes, Game Depot will be able to cover their costs because the
b) Original Numbers
3. Game Depot's managers prepare a cash budget in addition to the operating income bud
Because it will cost them less than $15 to save $174, it makes sense to go ahea
So, Game Depot's should take the discount
May June
= 2716
= 5044
= 6014
= 9409
= 1240
= 1940
= 288
= 3960
= 352
= 4464
14218 21209
ble to cover their costs because they receipts are 13.930 and expenditures are only 13.500
ddition to the operating income budget to plan cash flow to make sure the company has cash to pay vendor
= 8526
Game Depot's save 174
(13326-12600)
ave $174, it makes sense to go ahead and take the short term loan to pay the A/P early
3.500