Cash Disbursements Assume that Waycross Manufacturing manages its cash flow from

Question

Cash Disbursements Assume that Waycross Manufacturing manages its cash flow from its home office. Waycross controls cash disbursements by category and month. In setting its budget for the next six months, beginning in July, it used the following managerial guidelines: Category Guidelines Purchases Pay half in current and half in following month. Payroll Pay 70 percent in current month and 30 percent in following month. Loan Payments Pay total amount due each month. Predicted activity for selected months follow: Category May June July August Purchases $ 30,000 $ 44,000 $ 49,000 $ 55,000 Payroll 100,000 110,000 120,000 100,000 Loan payments 10,000 10,000 15,000 15,000 Prepare a schedule showing cash disbursements by account for July and August. Waycross Manufacturing Schedule of Cash Disbursements For the Months of July and August

July August

Accounts payable

Payroll

Loan paymenTS

Total

Explanation / Answer

July August Accounts payable 46500    [(44000*.5)+(49000*.5)] 52000    [(49000*.5)+(55000*.5)] Payroll 117000   [(120000*.7)+(110000*.3)] 106000   [(100000*.7)+(120000*.30)] Loan payment 15000 15000 Total 178500 173000

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