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 90 percent in current month and 10 percent in following month. Loan Payments Pay total amount due each month.

Explanation / Answer

Cash Disbursements July August Accounts payable 50,000 53,000 payroll 139,000 104,000 loan payments 12,000 12,000 Total 201,000 169,000 july Aug Accounts payable current (52000*1/2);(54000*1/2) 26000 27000 following month (48000*1/2);(52000*1/2) 24000 26000 Total 50000 53000 Payroll current (140000*90%);(100000*90%) 126000 90000 following month (130,000*10%);(140,000*10%) 13,000 14,000 Total 139000 104000

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