Exercise 13-15 Pronghorn Corporation is projecting a cash balance of $33,150 in

Question

Exercise 13-15 Pronghorn Corporation is projecting a cash balance of $33,150 in its December 31, 2016, balance sheet. Pronghorn's schedule of expected collections from customers for the first quarter of 2017 shows total collections of $204,425. The schedule of expected payments for direct materials for the first quarter of 2017 shows total payments of $47,515. Other information gathered for the first quarter of 2017 is sale of equipment $3,315; direct labor $77,350, manufacturing overhead $38,675, selling and administrative expenses $49,725; and purchase of securities $15,470. Pronghorn wants to maintain a balance of at least $27,625 cash at the end of each quarter. Prepare a cash budget for the first quarter. (Do not leave any answer field blank. Enter 0 for amounts.) PRONGHORN CORPORATION Cash Budget Ending Cash Balance

Explanation / Answer

Solution:

Beginning Cash Balance 33,150 Add: Receipts Collections from Customers 204,425 Sale of Equipment 3,315 Total Receipts 207,740 Total Available Cash 240,890 Less: Disbursements Direct Materials 47,515 Direct Labor 77,350 Manufacturing Overhead 38,675 Selling and Administrative Expenses 49,725 Purchase of Securities 15,470 Total Disbursements 228,735 Excess (Deficiency) of Available Cash Over Cash Disbursements 12,155 Financing Add: Borrowings 15,470 Less: Repayments 0 Ending Cash Balance 27625

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