E8-16 Preparing Cash Budget [LO 8-4] Walter Company has the following informatio

Question

E8-16 Preparing Cash Budget [LO 8-4] Walter Company has the following information for the month of March:

Walter pays all expenses in the month incurred. Manufacturing overhead includes $1,800 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 $8,200 during March. Walter can borrow in increments of $1,000 and would like to maintain a minimum cash balance of $12,000.
   
Required:
Prepare Walter’s cash budget for the month of March.

Cash balance, March 1 Collections from customers Paid to suppliers Manufacturing overhead Direct labor Selling and administrative expenses $ 18,120 42,500 23,500 7,300 8,850 5,400

Explanation / Answer

Beginning cash balance 18120 Budgeted cash receipts 42500 Budgeted cash payments 51450 =23500+7300+8850+5400-1800+8200 Preliminary cash balance 9170 Cash borrowed 3000 Ending cash balance 12170

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