La Belle Pâtisserie in Lyon, France, relies on budgeting to manage its pastry manufacturingand sales operations. Assume that La Belle Pâtisserie prepares monthly cash budgets.Relevant data from assumed operating budgets for 2021 are as follows:JanuaryFebruary€ 460,000185,00070,00050,00085,000€ 412,000210,000-85,000e65,00095,000SalesDirect material purchasesDirect laborManufacturing overheadSelling and administrative expensesAssume that La Belle sells pastry in its own shops as well as to other stores. Collections areexpected to be 75% in the month of sale, and 25% in the month following sale. La Belle pays60% of direct materials purchases in cash in the month of purchase, and the balance due inthe month following the purchase. All other items above are paid in the month incurred.(Depreciation has been excluded from manufacturing overhead and selling andadministrative expenses.)eOther data:4(1) Sales: December 2020, € 320,000e(2) Purchases of direct materials: December 2020, € 175,000«(3) Other receipts: January-First quarter COVID-19 small business relief subsidy fromeLyon City Government, € 2,000February-Sale of used equipment, € 4,000(4) Other disbursements: February-Purchased equipment, € 10,000-(5) Repaid debt: January, € 30,000eThe company's cash balance on January 1, 2021, is expected to be € 50,000. The companywants to maintain a minimum cash balance of € 45,000.eInstructions1. Prepare schedules foreA. Expected collections from customers (25%)-B. Expected payments for direct materials purchases for January and February (25%)2. Prepare a cash budget for January and February in tabular format. (50%)-

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1. Prepare schedules fore A. Expected collections from customers (25%) B. Expected payments for direct materials purchases for January and February (25%)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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