A manufacturing company's budgeted sales and cash payments for the next two months follow. Budgeted sales April $ 67,200 May $ 83,200 Budgeted cash payments for Direct materials Direct labor Overhead 15,320 4,520 21,000 13,320 4,120 17,600 March sales were $59,450. Sales are 80% on credit and 20% for cash. All credit sales are collected in full in the month after the sale. The March 31 balance sheet includes $16,600 in cash and $5,000 in loans payable. The company requires a $16,600 minimum cash balance, and it takes loans as needed at month-end to meet this minimum balance. Interest of 1% month (based on the loan balance at the beginning of the month) is paid at each month-end. Preliminary cash balances above $16,600 at the end of each month are used to repay loans. Expenses include office salaries of $4,320 per month, rent of $6,820 per month, and sales commissions of 10% of sales dollars; these expenses are paid in the month incurred. Enter answers in the tabs below. Required 1 Required 2 Prepare a cash budget for April and May. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Enter final answers in whole dollars. Beginning cash balance Less: Cash receipts Total cash available Less: Cash payments for Total cash payments Preliminary cash balance Loan activity Additional loan Repayment of loan Ending cash balance Cash Budget April May Loan balance Loan balance, Beginning of month Additional loan (loan repayment) Loan balance, End of month 0 0 < Required 1 Required 2 >
A manufacturing company's budgeted sales and cash payments for the next two months follow. Budgeted sales April $ 67,200 May $ 83,200 Budgeted cash payments for Direct materials Direct labor Overhead 15,320 4,520 21,000 13,320 4,120 17,600 March sales were $59,450. Sales are 80% on credit and 20% for cash. All credit sales are collected in full in the month after the sale. The March 31 balance sheet includes $16,600 in cash and $5,000 in loans payable. The company requires a $16,600 minimum cash balance, and it takes loans as needed at month-end to meet this minimum balance. Interest of 1% month (based on the loan balance at the beginning of the month) is paid at each month-end. Preliminary cash balances above $16,600 at the end of each month are used to repay loans. Expenses include office salaries of $4,320 per month, rent of $6,820 per month, and sales commissions of 10% of sales dollars; these expenses are paid in the month incurred. Enter answers in the tabs below. Required 1 Required 2 Prepare a cash budget for April and May. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Enter final answers in whole dollars. Beginning cash balance Less: Cash receipts Total cash available Less: Cash payments for Total cash payments Preliminary cash balance Loan activity Additional loan Repayment of loan Ending cash balance Cash Budget April May Loan balance Loan balance, Beginning of month Additional loan (loan repayment) Loan balance, End of month 0 0 < Required 1 Required 2 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:A manufacturing company's budgeted sales and cash payments for the next two months follow.
Budgeted sales
April
$ 67,200
May
$ 83,200
Budgeted cash payments for
Direct materials
Direct labor
Overhead
15,320
4,520
21,000
13,320
4,120
17,600
March sales were $59,450. Sales are 80% on credit and 20% for cash. All credit sales are collected in full in the month after the sale.
The March 31 balance sheet includes $16,600 in cash and $5,000 in loans payable. The company requires a $16,600 minimum cash
balance, and it takes loans as needed at month-end to meet this minimum balance. Interest of 1% month (based on the loan balance at
the beginning of the month) is paid at each month-end. Preliminary cash balances above $16,600 at the end of each month are used
to repay loans. Expenses include office salaries of $4,320 per month, rent of $6,820 per month, and sales commissions of 10% of sales
dollars; these expenses are paid in the month incurred.
Enter answers in the tabs below.
Required 1 Required 2
Prepare a cash budget for April and May.
Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Enter final answers in
whole dollars.
Beginning cash balance
Less: Cash receipts
Total cash available
Less: Cash payments for
Total cash payments
Preliminary cash balance
Loan activity
Additional loan
Repayment of loan
Ending cash balance
Cash Budget
April
May
Loan balance
Loan balance, Beginning of month
Additional loan (loan repayment)
Loan balance, End of month
0
0
< Required 1
Required 2 >
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