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ID: 2578526 • Letter: D
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degeted Sa esReven er tochegg Study IC ided Sol ×Acc weight! C Produces x , cengageNowv2 IO r et x signment/takeAssignmentMain.do?inprogress true eBook Show Me How Caloulato Cash Budget instructs you to prepare a monthly cash budget for the next three months. You are months. You are presented with the The controller of Sonoma Housewares Inc. following budget information May une uly 586,000 $90,000 $95,000 34,000 39,000 44,000 Seling and administrative expenses 15,000 16,000 22,000 80,000 Manufacturing costs Capital expenditures collected in the month fol wing insurance, and property tax expense represent $3,500 The company expects to sell about 10% of its merchandise for cash, or sale on account, 70% are expected to be and the remainder the following month (second month following sale). Depreciation, i manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in orthe remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in November. the following month Current assets as of May 1 include cash of $33,000, marketable securities of and $18,000 6,000 of accounts payable i $40,000, and accounts receivable of s90,000 ($72,000 from April sales from March sales). Sales on account for March and Agril were $60,0od and s72,000, respectively. Current liabilities as of May 1 include for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are nourred in April An estimated income tax payment of $14,000 will be made in June. Sonoma's regular quarterly dividend of s5,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $30,000 Previous NextExplanation / Answer
May June July Cash sale 8600 9000 9500 Coolection of accounts receivable 62400 60200 80200 Total cash receipts(A) 71000 69200 89700 Manufacturing cost 30400 34500 42300 Selling and administrative expense 15000 16000 22000 Capital expenditure 80000 Income tax 14000 dividend 5000 Total cash payments(B) 45400 64500 149300 Cash increase/ decrease (A-B)=C 25600 4700 -59600 Cash balance at the beginning of month(D) 33000 58600 63300 Cash balance at the end of month(C+D)=E 58600 63300 3700 Minimum cash balance(F) 30000 30000 30000 Excess or deficiency(E-F) 28600 33300 -26300
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