Cash BudgetJanuary - June Cash Inflow MonthJanuaryFebruaryMarchAprilMayJune Beginning Cash Balance $ - $ - $ - $ - $ - Add Receipts Collections from customers $ - $ - $ - $ - $ - $ - Total Increases To Cash $ - $ - $ - $ - $ - $ - Cash Outflow Direct Material Purchases $ - $ - $ - $ - $ - $ - Direct Labor$0$0$0$0$0$0 Manufacturing Overhead $ - $ - $ - $ - $ - $ - Selling and Administrative Expenses $ - $ - $ - $ - $ - $ - Interest Expense $ - $ - $ - $ - $ - Total Decreases To Cash $ - $ - $ - $ - $ - $ - Excess(deficiency) of cash $ - $ - $ - $ - $ - $ - Financing (line of credit): Borrowings (enter as positive value) Repayments (enter as negative value) Ending cash Balance $ - $ - $ - $ - $ - $ - Balance of line of credit $ - $ - $ - $ - $ - $ - Schedule of Expected Collections from customersJanuary - June JanuaryFebruaryMarchAprilMayJuneTotals Cash Collected From This Month's Sales (10%) $ - $ - $ - $ - $ - $ - $ - Cash collected from sale 1 month ago (70%) $ - $ - $ - $ - $ - $ - Cash collected from sale 2 months ago (20%) $ - $ - $ - $ - $ - Cash collected from sale 3 months ago (10%) $ - $ - $ - $ - Total collections $ - $ - $ - $ - $ - $ - $ - Schedule of Expected Payments for Direct materialsJanuary - June JanuaryFebruaryMarchAprilMayJuneTotalsAccounts Payable January 1 $ - Accounts Payable prior month $ - $ - $ - $ - $ - $ - Total Payments $ - $ - $ - $ - $ - $ - $ - Toodle Train Company makes toy trains for children. The trains are made of paintedwood with rubber wheels that really turn. The budget for unit sales for the first half of2010:January500February 800March700AprilMayJune150016001550Toodle expects July sales to be 1,750 units. Each train sells for $30. There were 25trains in Inventory on December 31, 2010. It is the company's policy to maintain afinished goods inventory at the end of each month equal to 5% of next month'santicipated sales.Each train requires two types of direct materials: wood and wheels. At December 31,2010 there was 23 board feet of wood and 206 wheels on hand.MaterialDesired EndingInventoryWood.3 board feet15% * next month's useWheels4 wheels10%* next month's useEach train requires .25 direct labor hours to produce. The average hourly wage includingbenefits is $20 per hour.Units used pertrainManufacturing Overhead costs for Toodle Train Company are as follows:$1.00 per direct labor hour$1.40 per direct labor hourIndirect MaterialsIndirect LaborUtilitiesMaintenanceSupervisory SalariesDepreciationProperty TaxesCost per unit$3 per boardfoot$ 0.10 perwheelDepreciationProperty Taxes.10 per direct labor hour and $800 per month.03 per direct labor hour and $400 per month$2,500 per month$1500 per month$80 per monthSelling and Administrative Expenses are as follows:Advertising$2,500 per monthOffice Salaries$1,800 per month$75 per month$50 per month(continued) 10% of sales are for cash; the rest are sold on account. 70% of sales on account arecollected in the month following the sale, 20% in the next month and 10% in thefollowing month. So far, Toodle Train has had no trouble with collecting all AccountsReceivable.Direct materials are all purchased on account and paid for in the month following thepurchase. Manufacturing overhead, direct labor and selling and administrative expensesare paid in the month they occur. Accounts Payable on December 31, 2010 was $400.Toodle Train Company currently has no debt. The cash balance December 31, 2010was $9,000 and company policy is to keep cash balance of at least $5,000. If the line ofcredit must be used, interest of 1% per month is paid in the following month on thebalance of the line of credit at the end of the prior month.

Cash Budget After the operating budgets (sales, manufacturing costs or procurement of goods, selling…

Cash Budget January - June Cash Inflow Month January February March April May June Beginning Cash Balance $ - $ - $ - $ - $ - Add Receipts Collections from customers $ - $ - $ - $ - $ - $ - Total Increases To Cash $ - $ - $ - $ - $ - $ - Cash Outflow Direct Material Purchases $ - $ - $ - $ - $ - $ - Direct Labor $0 $0 $0 $0 $0 $0 Manufacturing Overhead $ - $ - $ - $ - $ - $ - Selling and Administrative Expenses $ - $ - $ - $ - $ - $ - Interest Expense $ - $ - $ - $ - $ - Total Decreases To Cash $ - $ - $ - $ - $ - $ - Excess(deficiency) of cash $ - $ - $ - $ - $ - $ - Financing (line of credit): Borrowings (enter as positive value) Repayments (enter as negative value)

Cash Budget January - June Cash Inflow Month January February March April May June Beginning Cash Balance $ - $ - $ - $ - $ - Add Receipts Collections from customers $ - $ - $ - $ - $ - $ - Total Increases To Cash $ - $ - $ - $ - $ - $ - Cash Outflow Direct Material Purchases $ - $ - $ - $ - $ - $ - Direct Labor $0 $0 $0 $0 $0 $0 Manufacturing Overhead $ - $ - $ - $ - $ - $ - Selling and Administrative Expenses $ - $ - $ - $ - $ - $ - Interest Expense $ - $ - $ - $ - $ - Total Decreases To Cash $ - $ - $ - $ - $ - $ - Excess(deficiency) of cash $ - $ - $ - $ - $ - $ - Financing (line of credit): Borrowings (enter as positive value) Repayments (enter as negative value)

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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Cash Budget
January - June

Cash Inflow
Month	January	February	March	April	May	June
Beginning Cash Balance		$ -	$ -	$ -	$ -	$ -
Add Receipts
Collections from customers	$ -	$ -	$ -	$ -	$ -	$ -
Total Increases To Cash	$ -	$ -	$ -	$ -	$ -	$ -

Cash Outflow
Direct Material Purchases	$ -	$ -	$ -	$ -	$ -	$ -
Direct Labor	$0	$0	$0	$0	$0	$0
Manufacturing Overhead	$ -	$ -	$ -	$ -	$ -	$ -
Selling and Administrative Expenses	$ -	$ -	$ -	$ -	$ -	$ -
Interest Expense		$ -	$ -	$ -	$ -	$ -
Total Decreases To Cash	$ -	$ -	$ -	$ -	$ -	$ -

Excess(deficiency) of cash	$ -	$ -	$ -	$ -	$ -	$ -
Financing (line of credit):
Borrowings (enter as positive value)
Repayments (enter as negative value)
Ending cash Balance	$ -	$ -	$ -	$ -	$ -	$ -
Balance of line of credit	$ -	$ -	$ -	$ -	$ -	$ -
Schedule of Expected Collections from customers
January - June

	January	February	March	April	May	June	Totals

Cash Collected From This Month's Sales (10%)	$ -	$ -	$ -	$ -	$ -	$ -	$ -
Cash collected from sale 1 month ago (70%)		$ -	$ -	$ -	$ -	$ -	$ -
Cash collected from sale 2 months ago (20%)			$ -	$ -	$ -	$ -	$ -
Cash collected from sale 3 months ago (10%)				$ -	$ -	$ -	$ -
Total collections	$ -	$ -	$ -	$ -	$ -	$ -	$ -


Schedule of Expected Payments for Direct materials
January - June

	January	February	March	April	May	June	Totals
Accounts Payable January 1							$ -
Accounts Payable prior month		$ -	$ -	$ -	$ -	$ -	$ -
Total Payments	$ -	$ -	$ -	$ -	$ -	$ -	$ -

Toodle Train Company makes toy trains for children. The trains are made of painted
wood with rubber wheels that really turn. The budget for unit sales for the first half of
2010:
January
500
February 800
March
700
April
May
June
1500
1600
1550
Toodle expects July sales to be 1,750 units. Each train sells for $30. There were 25
trains in Inventory on December 31, 2010. It is the company's policy to maintain a
finished goods inventory at the end of each month equal to 5% of next month's
anticipated sales.
Each train requires two types of direct materials: wood and wheels. At December 31,
2010 there was 23 board feet of wood and 206 wheels on hand.
Material
Desired Ending
Inventory
Wood
.3 board feet
15% * next month's use
Wheels
4 wheels
10%* next month's use
Each train requires .25 direct labor hours to produce. The average hourly wage including
benefits is $20 per hour.
Units used per
train
Manufacturing Overhead costs for Toodle Train Company are as follows:
$1.00 per direct labor hour
$1.40 per direct labor hour
Indirect Materials
Indirect Labor
Utilities
Maintenance
Supervisory Salaries
Depreciation
Property Taxes
Cost per unit
$3 per board
foot
$ 0.10 per
wheel
Depreciation
Property Taxes
.10 per direct labor hour and $800 per month
.03 per direct labor hour and $400 per month
$2,500 per month
$1500 per month
$80 per month
Selling and Administrative Expenses are as follows:
Advertising
$2,500 per month
Office Salaries
$1,800 per month
$75 per month
$50 per month
(continued)

10% of sales are for cash; the rest are sold on account. 70% of sales on account are
collected in the month following the sale, 20% in the next month and 10% in the
following month. So far, Toodle Train has had no trouble with collecting all Accounts
Receivable.
Direct materials are all purchased on account and paid for in the month following the
purchase. Manufacturing overhead, direct labor and selling and administrative expenses
are paid in the month they occur. Accounts Payable on December 31, 2010 was $400.
Toodle Train Company currently has no debt. The cash balance December 31, 2010
was $9,000 and company policy is to keep cash balance of at least $5,000. If the line of
credit must be used, interest of 1% per month is paid in the following month on the
balance of the line of credit at the end of the prior month.

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