Walter pays all expenses in the month incurred. Manufacturing overhead includes

Question

   

Walter pays all expenses in the month incurred. Manufacturing overhead includes $2,050 for machinery depreciation, but the amount for selling and administrative expenses is exclusive of depreciation. Additionally, Walter also expects to buy a piece of property for $8,700 during March. Walter can borrow in increments of $1,000 and would like to maintain a minimum cash balance of $17,000.

   

Prepare Walter’s cash budget for the month of March.

Walter Company has the following information for the month of March:

Explanation / Answer

Note: cash has been borrowed in multiple of $1000

Budgeted cash payments Paid to suppliers $   24,000.00 Direct labour $     9,100.00 Selling & Administrative expense $     5,900.00 Manufacturing Overhead (7800 - 2050) $     5,750.00 Purchase of Property $     8,700.00 $   53,450.00 Beginning Cash balance $   18,870.00 Budgeted cash receipts $   45,000.00 Budgeted cash Payments $ -53,450.00 Preliminary cash balance $   10,420.00 Cash borrowed $ 7000.00 Ending cash balance $   17,420.00

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