CengageNoww Online teaching and learning resource from Cengage Leanng Internet E

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CengageNoww Online teaching and learning resource from Cengage Leanng Internet Explorer he controller of Dash Shoes Inc. instructs you to prepare a Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget inlormation Harch ApriMay $97,000 $123,000 $161,000 41,00053,000 58,000 Manufacturing costs Selling and administraltive espenses 28,000 33,000 35,000 Capital expensitures The cempany expects to sell about 1 company expects tosolab 10% of its merchandise for cash orsales on account, 60% are expected to be colded in the month folosing the sale ad the remainder be tollowing month (second menth following sale), Depeeciation, Insurance, and property tax expense ropresent s9,000 of the estimated monely manufacharing costs. T which they are incurred and the balance ins the following month Current assets as of March 1 indude cash af The annual 75% are epeted to te pad in the month premium is paid in July, and the anual property taxes are pod i, hovember.oftho remainder or sundeturing costs, $37.,000, marketable securities of $52,000, and accounts recelivable of $116,200(s5,000 from February sales and $31,200 from May 20 and so,000 of accounts payable incurred in Fetruary for manufacturing costs, All seling and administrative expenses are paid in cash in the peried they are incurred. t be made in April. Dash Shoes' regular quarterly dividend of $9.000 in March. An estimated income tax payment of $15,000 w ise-peded to be declared im Apri and paid in May. Management dedes to maitaamimur, ta h blne encept overall cash deerease and deficiency which should be indicated with a ign Ansume 360 PreviousNe

Explanation / Answer

Cash Budget March April May Estimated Cash receipts from Cash Sales (10%) 9700 12300 16100 Collection of accounts receivable 82200 82380 101340 Dividends 2900 Total cash receipts 94800 94680 117440 Estimated cash payments Manufacturing costs 33000 50000 47750 Selling and administrative expenses 28000 33000 35000 Capital expenditure 39000 Other purpose Note payable ( incl interest) 50449.86 Income tax payment 15000 Dividend 9000 Total cash payments 61000 98000 181199.9 Cash increase or (decrease) 33800 -3320 -63759.9 cash at the beginning of month 37000 70800 67480 Cash balance at end of month 70800 67480 3720.137 Minimum cash balance 29000 29000 29000 excess or ( deficiency) 41800 38480 -25279.9 collection of accounts receivable March April May January sales 31200 february sales 51000 30000 March sales 52380 34920 April sales 66420 Total 82200 82380 101340 Interest on notes payable 1449.863 (49000*!2%/365*90)

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