Bonita Company expects to have a cash balance of $52,200 on January 1, 2022. Relevant monthly budget data for the first 2 months of 2022 are as follows. Collections from customers: January $98,600, February $174,000. Payments for direct materials: January $58,000, February $87,000. Direct labor: January $34,800, February $52,200. Wages are paid in the month they are incurred. Manufacturing overhead: January $24,360, February $29,000. These costs include depreciation of $1,740 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $17,400, February $23,200. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $13,920 in cash. Bonita Company has a line of credit at a local bank that enables it to borrow up to $29,000. The company wants to maintain a minimum monthly cash balance of $23,200. Prepare a cash budget for January and February.
Bonita Company expects to have a cash balance of $52,200 on January 1, 2022. Relevant monthly budget data for the first 2 months of 2022 are as follows. Collections from customers: January $98,600, February $174,000. Payments for direct materials: January $58,000, February $87,000. Direct labor: January $34,800, February $52,200. Wages are paid in the month they are incurred. Manufacturing overhead: January $24,360, February $29,000. These costs include depreciation of $1,740 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $17,400, February $23,200. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $13,920 in cash. Bonita Company has a line of credit at a local bank that enables it to borrow up to $29,000. The company wants to maintain a minimum monthly cash balance of $23,200. Prepare a cash budget for January and February.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Bonita Company expects to have a cash balance of $52,200 on January 1, 2022. Relevant monthly budget data for the first 2 months of
2022 are as follows.
Collections from customers: January $98,600, February $174,000.
Payments for direct materials: January $58,000, February $87,000.
Direct labor: January $34,800, February $52,200. Wages are paid in the month they are incurred.
Manufacturing overhead: January $24,360, February $29,000. These costs include depreciation of $1,740 per month. All other
overhead costs are paid as incurred.
Selling and administrative expenses: January $17,400, February $23,200. These costs are exclusive of depreciation. They are paid as
incurred.
Sales of marketable securities in January are expected to realize $13,920 in cash. Bonita Company has a line of credit at a local bank
that enables it to borrow up to $29,000. The company wants to maintain a minimum monthly cash balance of $23,200.
Prepare a cash budget for January and February.
VI
BONITA COMPANY
Cash Budget
>
<
January
Februar
Transcribed Image Text:1
Sale of Marketable Securities
Beginning Cash Balance
Excess (Deficiency) of Available Cash Over Cash Disbursements
Total Disbursements
Direct Materials
Financing
Manufacturing Overhead
Collections from Customers
Borrowings
Total Available Cash
Selling and Administrative Expenses
Total Receipts
Repayments
Ending Cash Balance
Direct Labor
Disbursements
Receipts
<
<
GA
January
LA
Februar
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