Avery Company has prepared the following schedules and additional information: 1(Click the icon to view the cash receipts schedule.) 2(Click the icon to view the cash payments schedule.) 3(Click the icon to view the additional information.) Complete a cash budget for Avery Company for January, February and March. (Complete all input fields. Enter a "0" for any zero balances. Round all amounts entered into the cash budget to the nearest whole dollar. Enter a cash deficiency with a minus sign or parentheses.) Avery Company Cash Budget January, February, and March January Beginning cash balance $5,500 Cash receipts 10,800 Cash available 16,300 Cash payments: Purchases of direct materials 0 Direct labor 2,900 Manufacturing overhead 3,720 Selling and administrative expenses 5,920 Interest expense 0 Total cash payments 12,540 Ending cash balance before financing 3,760 Minimum cash balance desired (5,500) Projected cash excess (deficiency) (1,740) Financing: Borrowing 2,000 Principal repayments 0 Total effects of financing 2,000 Ending cash balance $5,760 February $5,760 14,380 20,140 3,900 3,100 850 4,550 18 12,418 7,722 (5,500) 2,222 0 (2,000) (2,000) $5,722 March $5,722 13,640 19,362 3,600 4,000 850 4,550 0 13,000 6,362 (5,500) 862 0 0 0 $6,362 Total 1: Reference Cash Receipts from Customers January February March Total Total sales $13,500 $14,600 $13,400 $41,500 January February March Total Cash Receipts from Customers: Accounts Receivable balance, January 1 January—Cash sales $8,100 January—Credit sales, collection of January sales in January 2,700 January—Credit sales, collection of January sales in February $2,700 February—Cash sales 8,760 February—Credit sales, collection of February sales in February 2,920 February—Credit sales, collection of February sales in March $2,920 March—Cash sales 8,040 March—Credit sales, collection of March sales in March 2,680 Total cash receipts from customers $10,800 $14,380 $13,640 $38,820 Accounts Receivable balance, March 31: March—Credit sales, collection of March sales in April $2,680 2: Reference January February March Total Cash Payments Direct Materials: Accounts Payable balance, January 1 $0 January—Direct material purchases paid in February $3,900 February—Direct material purchases paid in March $3,600 Total payments for direct materials 0 3,900 3,600 $7,500 Direct Labor: Total payments for direct labor 2,900 3,100 4,000 10,000 Manufacturing Overhead: Utilities for plant 850 850 1,700 Property taxes on plant 3,720 3,720 Total payments for manufacturing overhead 3,720 850 850 5,420 Selling and Administrative Expenses: Utilities for office 550 550 1,100 Property taxes on office 1,920 1,920 Office salaries 4,000 4,000 4,000 12,000 Total payments for Selling and Admin. expenses 5,920 4,550 4,550 15,020 Total cash payments $12,540 $12,400 $13,000 $37,940 Acccount balances, March 31: Prepaid Property Taxes $4,230 Accounts Payable $4,500 Utilities Payable $1,400 3: More Info Avery's beginning cash balance is $5,500 and Avery desires to maintain a minimum ending cash balance of $5,500. Avery borrows cash as needed at the beginning of each month in increments of $1,000 and repays the amounts borrowed in increments of $1,000 at the beginning of months when excess cash is available. The interest rate on amounts borrowed is 11% per year. Interest is paid at the beginning of the month on the outstanding balance from the previous month. YOU ANSWERED: February 5760 14380 20140 3900 3100 850 4550 18 12418 7722 5500 2222 0 2000 nothing nothing March 7722 13640 21362 3600 4000 850 4550 0 13000 8362 5500 2362 0 0 0 nothing

Avery Company has prepared the following schedules and additional information: 1(Click the icon to view the cash receipts schedule.) 2(Click the icon to view the cash payments schedule.) 3(Click the icon to view the additional information.) Complete a cash budget for Avery Company for January, February and March. (Complete all input fields. Enter a "0" for any zero balances. Round all amounts entered into the cash budget to the nearest whole dollar. Enter a cash deficiency with a minus sign or parentheses.) Avery Company Cash Budget January, February, and March January Beginning cash balance $5,500 Cash receipts 10,800 Cash available 16,300 Cash payments: Purchases of direct materials 0 Direct labor 2,900 Manufacturing overhead 3,720 Selling and administrative expenses 5,920 Interest expense 0 Total cash payments 12,540 Ending cash balance before financing 3,760 Minimum cash balance desired (5,500) Projected cash excess (deficiency) (1,740) Financing: Borrowing 2,000 Principal repayments 0 Total effects of financing 2,000 Ending cash balance $5,760 February $5,760 14,380 20,140 3,900 3,100 850 4,550 18 12,418 7,722 (5,500) 2,222 0 (2,000) (2,000) $5,722 March $5,722 13,640 19,362 3,600 4,000 850 4,550 0 13,000 6,362 (5,500) 862 0 0 0 $6,362 Total 1: Reference Cash Receipts from Customers January February March Total Total sales $13,500 $14,600 $13,400 $41,500 January February March Total Cash Receipts from Customers: Accounts Receivable balance, January 1 January—Cash sales $8,100 January—Credit sales, collection of January sales in January 2,700 January—Credit sales, collection of January sales in February $2,700 February—Cash sales 8,760 February—Credit sales, collection of February sales in February 2,920 February—Credit sales, collection of February sales in March $2,920 March—Cash sales 8,040 March—Credit sales, collection of March sales in March 2,680 Total cash receipts from customers $10,800 $14,380 $13,640 $38,820 Accounts Receivable balance, March 31: March—Credit sales, collection of March sales in April $2,680 2: Reference January February March Total Cash Payments Direct Materials: Accounts Payable balance, January 1 $0 January—Direct material purchases paid in February $3,900 February—Direct material purchases paid in March $3,600 Total payments for direct materials 0 3,900 3,600 $7,500 Direct Labor: Total payments for direct labor 2,900 3,100 4,000 10,000 Manufacturing Overhead: Utilities for plant 850 850 1,700 Property taxes on plant 3,720 3,720 Total payments for manufacturing overhead 3,720 850 850 5,420 Selling and Administrative Expenses: Utilities for office 550 550 1,100 Property taxes on office 1,920 1,920 Office salaries 4,000 4,000 4,000 12,000 Total payments for Selling and Admin. expenses 5,920 4,550 4,550 15,020 Total cash payments $12,540 $12,400 $13,000 $37,940 Acccount balances, March 31: Prepaid Property Taxes $4,230 Accounts Payable $4,500 Utilities Payable $1,400 3: More Info Avery's beginning cash balance is $5,500 and Avery desires to maintain a minimum ending cash balance of $5,500. Avery borrows cash as needed at the beginning of each month in increments of $1,000 and repays the amounts borrowed in increments of $1,000 at the beginning of months when excess cash is available. The interest rate on amounts borrowed is 11% per year. Interest is paid at the beginning of the month on the outstanding balance from the previous month. YOU ANSWERED: February 5760 14380 20140 3900 3100 850 4550 18 12418 7722 5500 2222 0 2000 nothing nothing March 7722 13640 21362 3600 4000 850 4550 0 13000 8362 5500 2362 0 0 0 nothing

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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Question

Avery

Company has prepared the following schedules and additional information:

1(Click

the icon to view the cash receipts schedule.)

2(Click

the icon to view the cash payments schedule.)

3(Click

the icon to view the additional information.)

Complete a cash budget for

Avery

Company for

January,

February

and

March.

(Complete all input fields. Enter a "0" for any zero balances. Round all amounts entered into the cash budget to the nearest whole dollar. Enter a cash deficiency with a minus sign or parentheses.)

Avery Company

Cash Budget

January, February, and March

	January
Beginning cash balance	$5,500
Cash receipts	10,800
Cash available	16,300
Cash payments:
Purchases of direct materials	0
Direct labor	2,900
Manufacturing overhead	3,720
Selling and administrative expenses	5,920
Interest expense	0
Total cash payments	12,540
Ending cash balance before financing	3,760
Minimum cash balance desired	(5,500)
Projected cash excess (deficiency)	(1,740)
Financing:
Borrowing	2,000
Principal repayments	0
Total effects of financing	2,000
Ending cash balance	$5,760

February
$5,760
14,380
20,140

3,900
3,100
850
4,550
18
12,418
7,722
(5,500)
2,222

0
(2,000)
(2,000)
$5,722

March
$5,722
13,640
19,362

3,600
4,000
850
4,550
0
13,000
6,362
(5,500)
862

0
0
0
$6,362

Total

1: Reference

Cash Receipts from Customers
	January	February	March	Total
Total sales	$13,500	$14,600	$13,400	$41,500
		January	February	March	Total
Cash Receipts from Customers:
Accounts Receivable balance, January 1
January—Cash sales	$8,100
January—Credit sales, collection of January sales in January	2,700
January—Credit sales, collection of January sales in February		$2,700
February—Cash sales		8,760
February—Credit sales, collection of February sales in February		2,920
February—Credit sales, collection of February sales in March			$2,920
March—Cash sales			8,040
March—Credit sales, collection of March sales in March			2,680
Total cash receipts from customers	$10,800	$14,380	$13,640	$38,820

Accounts Receivable balance, March 31:
March—Credit sales, collection of March sales in April	$2,680

2: Reference

		January	February	March	Total
Cash Payments
Direct Materials:
Accounts Payable balance, January 1	$0
January—Direct material purchases paid in February		$3,900
February—Direct material purchases paid in March			$3,600
Total payments for direct materials	0	3,900	3,600	$7,500

Direct Labor:
Total payments for direct labor	2,900	3,100	4,000	10,000


Manufacturing Overhead:
Utilities for plant		850	850	1,700
Property taxes on plant	3,720			3,720
Total payments for manufacturing overhead	3,720	850	850	5,420

Selling and Administrative Expenses:
Utilities for office		550	550	1,100
Property taxes on office	1,920			1,920
Office salaries	4,000	4,000	4,000	12,000
Total payments for Selling and Admin. expenses	5,920	4,550	4,550	15,020

Total cash payments	$12,540	$12,400	$13,000	$37,940

Acccount balances, March 31:
Prepaid Property Taxes	$4,230
Accounts Payable	$4,500
Utilities Payable	$1,400

3: More Info

Avery's

beginning cash balance is

$5,500

and

Avery

desires to maintain a minimum ending cash balance of

$5,500.

Avery

borrows cash as needed at the beginning of each month in increments of $1,000 and repays the amounts borrowed in increments of $1,000 at the beginning of months when excess cash is available. The interest rate on amounts borrowed is

11%

per year. Interest is paid at the beginning of the month on the outstanding balance from the previous month.

YOU ANSWERED:

February
5760
14380
20140

3900
3100
850
4550
18
12418
7722
5500
2222

0
2000
nothing
nothing

March
7722
13640
21362

3600
4000
850
4550
0
13000
8362
5500
2362

0
0
0
nothing

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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