. The Finance officer of Your Natural Romance Co asked for a CASH BUDGET given the following data: November $370,000 164,000 92,000 December $400,000 210,000 102,000 240,000 October Sales $320,000 132,000 Operating Costs Selling and Administrative Expenses 80,000 Capital Expenses Among the sales figures, only 90% are treated as receivables, with the other value as down payment. Six tenths of the receivables are collected in the following month and the rest a month further. Semiannual depreciation costs $144,000. Of the remaining operating costs, 80% will be paid in the month they are incurred and the rest, a month after. Current assets as of October 1 include cash of $84,000, marketable securities of $50,000 and accounts receivable of $396,000 ($300,000 from September sales and $96,000 from August Sales). Sales on account in August and September were $240,000 and $300,000 respectively. Current liabilities as of October 1 include $26,000 of accounts payable in September for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax of $48,000 will be made in November. The quarterly dividend is expected to be declared in November and paid in December. Management wishes to maintain a minimum cash balance of $80,000. Construct a cash budget for the three months mentioned. Put the corresponding notes as may be applicable (Note A, Note B, etc)
. The Finance officer of Your Natural Romance Co asked for a CASH BUDGET given the following data: November $370,000 164,000 92,000 December $400,000 210,000 102,000 240,000 October Sales $320,000 132,000 Operating Costs Selling and Administrative Expenses 80,000 Capital Expenses Among the sales figures, only 90% are treated as receivables, with the other value as down payment. Six tenths of the receivables are collected in the following month and the rest a month further. Semiannual depreciation costs $144,000. Of the remaining operating costs, 80% will be paid in the month they are incurred and the rest, a month after. Current assets as of October 1 include cash of $84,000, marketable securities of $50,000 and accounts receivable of $396,000 ($300,000 from September sales and $96,000 from August Sales). Sales on account in August and September were $240,000 and $300,000 respectively. Current liabilities as of October 1 include $26,000 of accounts payable in September for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax of $48,000 will be made in November. The quarterly dividend is expected to be declared in November and paid in December. Management wishes to maintain a minimum cash balance of $80,000. Construct a cash budget for the three months mentioned. Put the corresponding notes as may be applicable (Note A, Note B, etc)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:. The Finance officer of Your Natural Romance Co asked for a CASH BUDGET given the
following data:
October
November
December
$320,000
132,000
$370,000
164,000
92,000
Sales
$400,000
210,000
102,000
240,000
Operating Costs
Selling and Administrative Expenses 80,000
Capital Expenses
Among the sales figures, only 90% are treated as receivables, with the other value as down
payment. Six tenths of the receivables are collected in the following month and the rest a month
further. Semiannual depreciation costs $144,000. Of the remaining operating costs, 80% will be
paid in the month they are incurred and the rest, a month after.
Current assets as of October 1 include cash of $84,000, marketable securities of $50,000 and
accounts receivable of $396,000 ($300,000 from September sales and $96,000 from August
Sales). Sales on account in August and September were $240,000 and $300,000 respectively.
Current liabilities as of October 1 include $26,000 of accounts payable in September for
manufacturing costs. All selling and administrative expenses are paid in cash in the period they
are incurred. An estimated income tax of $48,000 will be made in November. The quarterly
dividend is expected to be declared in November and paid in December. Management wishes to
maintain a minimum cash balance of $80,000.
Construct a cash budget for the three months mentioned. Put the corresponding notes as
may be applicable (Note A, Note B, etc)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education