Haas Company prepares monthly cash budgets. Relevant data from operating budgets
ID: 2385950 • Letter: H
Question
Haas Company prepares monthly cash budgets. Relevant data from operating budgets for 2011 are:January February
Sales $355,200 $408,700
Direct materials purchases 114,400 133,600
Direct labor 91,900 108,100
Manufacturing overhead 72,400 80,200
Selling and administrative expenses 80,700 89,800
All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,500 of depreciation per month.
Other data:
Credit sales: November 2010, $268,600; December 2010, $321,100.
Purchases of direct materials: December 2010, $106,300.
Other receipts: January-Collection of December 31, 2010, notes receivable $17,600; February-Proceeds from sale of securities $8,340.
Other disbursements: February-Withdrawal of $8,460 cash for personal use of owner, Dewey Yaeger.
The company's cash balance on January 1, 2011, is expected to be $72,920. The company wants to maintain a minimum cash balance of $51,030.
Incorrect.
Complete the schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases. (If answer is zero, please enter 0, do not leave any fields blank.)
Expected Collections from Customers
January February
November $ $ 0
December
January
February
Total collections $
$
Expected Payments for Direct Materials
January February
December $ $ 0
January
February
Total collections $
$
Incorrect.
Complete the cash budget for January and February in columnar form. (List multiple entries from largest to smallest amounts, e.g. 10, 5, 1 for the January amounts.)
HAAS COMPANY
Cash Budget
For the Two Months Ending February 28, 2011
January February
Beginning cash balance $
$
Add: Receipts
Collections from customers
Notes receivable 0
Sale of securities 0
Total receipts
Total available cash
Less: Disbursements
Direct materials
Direct labor
BorrowingsRepaymentsCollections from customersSelling and administrative expensesDirect laborNotes receivableSale of securitiesWithdrawal by ownerManufacturing overheadDirect materials
Selling and administrative expensesWithdrawal by ownerManufacturing overheadBorrowingsRepaymentsCollections from customersNotes receivableSale of securitiesDirect materialsDirect labor
Withdrawal by owner 0
Total disbursements
Excess (deficiency) of available cash over cash disbursements
Financing
Borrowings 0
Repayments 0
0
Ending cash balance $
$
Explanation / Answer
Complete the cash budget for January and February in columnar form. (List multiple entries from largest to smallest amounts, e.g. 10, 5, 1 for the January amounts.)
January February
November
$268,600 x 20% $53,720 $0
Total November $53,720 $0 Use this line to fill answer for Nov.
December
$321,100 x 30% $96,330
$321,100 x 20% $64,220
Total December $96,330 $64,220 Use this line to fill answer for Dec.
January
355,200 x 50% $177,600
355,200 x 30% $106,560
Total January $177,600 $106,560 Use this line to fill answer for Jan.
February
$408,700 x 50% $204,350
Total February $204,350 Use this line to fill answer for Feb.
Total Collections $327,650 $375,130
Expected Payments for Direct Materials
January February
December ($106,300) $42,520 $0
January ($114,400) $68,640 $45,760
February ($133,600) $80,160
Total payments $111,160 $125,920
HAAS COMPANY
Cash Budget
For the Two Months Ending February 28, 2011
January February
Beginning cash balance $72,920 $63,510
Add: Receipts
Collections from customers $327,650 $375,130
Notes receivable $17,600
Sale of securities $8,340
Total receipts $345,250 $383,470
Total available cash $418,170 $446,980
Less: Disbursements
Direct materials $111,160 $125,920
Direct labor $91,900 $108,100
Manufacturing Overhead $72,400 $80,200
Selling and admin. Exp. $79,200 $88,300
Withdrawal by owner $8,460
Total disbursements $354,660 $410,980
Excess (deficiency) of
available cash over
cash disbursements $63,510 $36,000
Financing
Borrowings 0 $15,030
Repayments 0 0
Ending cash balance $63,510 $51,030
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