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:

Predicted activity for selected months follow:

Prepare a schedule showing cash disbursements by account for July and August.

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.

Explanation / Answer

Waycross Manufacturing Schedule of Disbursement For the Month of July and August July August Account Payable June ($40000 *50%) $20,000 July ($48000*50%) $24,000 $24,000 August ($50000*50%) $25,000 Total (a) $44,000 $49,000 Payroll June ($120000*30%) $36,000 July ($130000*70%) ($130000*30%) $91,000 $39,000 August($100000*70%) $70,000 Total (b) $127,000 $109,000 Loan Payment ( c) $11,000 $11,000 Total (a+b+c) $182,000 $169,000

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