Use the following information to prepare the September cash budget for PTO Manuf
ID: 2421590 • Letter: U
Question
Use the following information to prepare the September cash budget for PTO Manufacturing Co. The following informaition relates to expected cash receipts and cash disbursements for the month ended September 30.
a. Beginning cash balance, September 1, $40,000.
b. Budgeted cash receipts from sales in September, $225,000.
c. Raw materials are purchased on account. Purchase amounts are: August (actual), $80,000 and September (budgeted), $110,000. Payments for direct materials are made as follows: 65% in the month of purchase and 35% in the month following purchase.
d. Budgeted cash disbursements for direct labor in Spetember, $40,000.
e. Budgeted depricitaion expense for September, $4000
f. Other cash expenses budgeted for September, $60,000
g. Accrued income taxes payabel in September, $10,000
h. Bank loan interest payabel in Septermber, $1,000
Explanation / Answer
Cash Budget
Cash at beginning $40,000
Add:Cash receipts 225,000
total receipts $265,000
less:Disbursements
Raw materials (99,500)
Direct labor (40,000)
Other expense (60,000)
Income tax paid (10,000)
Bank interest (1,000)
total disbursement (210,500)
Cash at end $54,500
Working notes
1)Depreciation is not cash disbursement
2)Cash paid for Raw materials
August 80,000@35% = $28,000
September 110,000@65% = 71,500
total 99,500
Cash Budget
Cash at beginning $40,000
Add:Cash receipts 225,000
total receipts $265,000
less:Disbursements
Raw materials (99,500)
Direct labor (40,000)
Other expense (60,000)
Income tax paid (10,000)
Bank interest (1,000)
total disbursement (210,500)
Cash at end $54,500
Working notes
1)Depreciation is not cash disbursement
2)Cash paid for Raw materials
August 80,000@35% = $28,000
September 110,000@65% = 71,500
total 99,500
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.