Hoffman Inc. had a cash balance of $100,000 on their December 31, 2011 balance s
ID: 2352808 • Letter: H
Question
Hoffman Inc. had a cash balance of $100,000 on their December 31, 2011 balance sheet.The company wants to maintain a balance of at least $60,000 cash at the end of each quarter. Other relevant cash receipts and disbursements budgeted for the quarter include:
Collections from customers $200,000
Payments for direct materials 60,000
Payment for Direct labor 70,000
Sale of equipment 25,000
Purchase of marketable securities 20,000
Selling & administrative expenses 70,000
Manufacturing overhead 80,000
Prepare a cash budget for the first quarter.
Beginning cash balance
Add: Receipts
Total receipts
Total available cash
Less: Disbursement
Total disbursements
Excess (deficiency) of available cash over disbursements
Financing
Borrowings
Repayments 0
Ending cash balance
Explanation / Answer
Beginning cash balance
100,000
Add: Receipts
Collections from customers
200,000
Sale of equipment
25,000
Total receipts
225,000
Less: Disbursements
payments for direct material
60,000
payments for direct labor
70,000
purchase of securities
20,000
selling and admin
70,000
manufacturing overhead
80,000
Total disbursements
300,000
Excess(deficiency) of available cash over disbursements
25,000
financing
borrowings
35,000
repayments
0
ending cash balance
60,000
Beginning cash balance
100,000
Add: Receipts
Collections from customers
200,000
Sale of equipment
25,000
Total receipts
225,000
Less: Disbursements
payments for direct material
60,000
payments for direct labor
70,000
purchase of securities
20,000
selling and admin
70,000
manufacturing overhead
80,000
Total disbursements
300,000
Excess(deficiency) of available cash over disbursements
25,000
financing
borrowings
35,000
repayments
0
ending cash balance
60,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.