eBookCash BudgetThe controller of Shoe Mart Inc. asks you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: JanuaryFebruaryMarchSales$148,000 $179,000 $238,000 Manufacturing costs62,000 77,000 86,000 Selling and administrative expenses43,000 48,000 52,000 Capital expenditures_ _ 57,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 65% are expected to be collected in full in the month following the sale and the remainder the following month. Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in June, and the annual property taxes are paid in October. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. All sales and administrative expenses are paid in the month incurred.Current assets as of January 1 include cash of $56,000, marketable securities of $80,000, and accounts receivable of $171,300 ($130,000 from December sales and $41,300 from November sales). Sales on account in November and December were $118,000 and $130,000, respectively. Current liabilities as of January 1 include a $74,000, 12%, 90-day note payable due March 20 and $7,000 of accounts payable incurred in December for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $4,400 in dividends will be received in January. An estimated income tax payment of $21,000 will be made in February. Shoe Mart's regular quarterly dividend of $7,000 is expected to be declared in February and paid in March. Management desires to maintain a minimum cash balance of $44,000.Required:1. Prepare a monthly cash budget and supporting schedules for January, February, and March. Enter an increase in the month's cash balance or an excess cash amount as a positive number. Enter a decrease in the month's cash balance or a cash deficiency as a negative number. Assume 360 days per year for interest calculations.Shoe Mart Inc.Cash BudgetFor the Three Months Ending March 31 JanuaryFebruaryMarchEstimated cash receipts from: Cash sales$fill in the blank 5052aa05bf9a047_1$fill in the blank 5052aa05bf9a047_2$fill in the blank 5052aa05bf9a047_3Collection of accounts receivablefill in the blank 5052aa05bf9a047_4fill in the blank 5052aa05bf9a047_5fill in the blank 5052aa05bf9a047_6Dividendsfill in the blank 5052aa05bf9a047_7fill in the blank 5052aa05bf9a047_8fill in the blank 5052aa05bf9a047_9Total cash receipts$fill in the blank 5052aa05bf9a047_10$fill in the blank 5052aa05bf9a047_11$fill in the blank 5052aa05bf9a047_12Estimated cash payments for: Manufacturing costs$fill in the blank 5052aa05bf9a047_13$fill in the blank 5052aa05bf9a047_14$fill in the blank 5052aa05bf9a047_15Selling and administrative expensesfill in the blank 5052aa05bf9a047_16fill in the blank 5052aa05bf9a047_17fill in the blank 5052aa05bf9a047_18Capital expendituresfill in the blank 5052aa05bf9a047_19fill in the blank 5052aa05bf9a047_20fill in the blank 5052aa05bf9a047_21Other purposes: Note payable (including interest)fill in the blank 5052aa05bf9a047_22fill in the blank 5052aa05bf9a047_23fill in the blank 5052aa05bf9a047_24Income taxfill in the blank 5052aa05bf9a047_25fill in the blank 5052aa05bf9a047_26fill in the blank 5052aa05bf9a047_27Dividendsfill in the blank 5052aa05bf9a047_28fill in the blank 5052aa05bf9a047_29fill in the blank 5052aa05bf9a047_30Total cash payments$fill in the blank 5052aa05bf9a047_31$fill in the blank 5052aa05bf9a047_32$fill in the blank 5052aa05bf9a047_33Cash increase (decrease)$fill in the blank 5052aa05bf9a047_34$fill in the blank 5052aa05bf9a047_35$fill in the blank 5052aa05bf9a047_36Cash balance at beginning of monthfill in the blank 5052aa05bf9a047_37fill in the blank 5052aa05bf9a047_38fill in the blank 5052aa05bf9a047_39Cash balance at end of month$fill in the blank 5052aa05bf9a047_40$fill in the blank 5052aa05bf9a047_41$fill in the blank 5052aa05bf9a047_42Minimum cash balancefill in the blank 5052aa05bf9a047_43fill in the blank 5052aa05bf9a047_44fill in the blank 5052aa05bf9a047_45Excess (deficiency)$fill in the blank 5052aa05bf9a047_46$fill in the blank 5052aa05bf9a047_47fill in the blank 5052aa05bf9a047_48

cash budget reveals the liquid cash position of the company and it is exact amount of cash outflow…

Cash Budget The controller of Shoe Mart Inc. asks you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: January February March Sales $148,000 $179,000 $238,000 Manufacturing costs 62,000 77,000 86,000 Selling and administrative expenses 43,000 48,000 52,000 Capital expenditures _ _ 57,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 65% are expected to be collected in full in the month following the sale and the remainder the following month. Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in June, and the annual property taxes are paid in October. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. All sales and administrative expenses are paid in the month incurred. Current assets as of January 1 include cash of $56,000, marketable securities of $80,000, and accounts receivable of $171,300 ($130,000 from December sales and $41,300 from November sales). Sales on account in November and December were $118,000 and $130,000, respectively. Current liabilities as of January 1 include a $74,000, 12%, 90-day note payable due March 20 and $7,000 of accounts payable incurred in December for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $4,400 in dividends will be received in January. An estimated income tax payment of $21,000 will be made in February. Shoe Mart's regular quarterly dividend of $7,000 is expected to be declared in February and paid in March. Management desires to maintain a minimum cash balance of $44,000. Required: 1. Prepare a monthly cash budget and supporting schedules for January, February, and March. Enter an increase in the month's cash balance or an excess cash amount as a positive number. Enter a decrease in the month's cash balance or a cash deficiency as a negative number. Assume 360 days per year for interest calculations. Shoe Mart Inc.Cash BudgetFor the Three Months Ending March 31

Cash Budget The controller of Shoe Mart Inc. asks you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: January February March Sales $148,000 $179,000 $238,000 Manufacturing costs 62,000 77,000 86,000 Selling and administrative expenses 43,000 48,000 52,000 Capital expenditures _ _ 57,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 65% are expected to be collected in full in the month following the sale and the remainder the following month. Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in June, and the annual property taxes are paid in October. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. All sales and administrative expenses are paid in the month incurred. Current assets as of January 1 include cash of $56,000, marketable securities of $80,000, and accounts receivable of $171,300 ($130,000 from December sales and $41,300 from November sales). Sales on account in November and December were $118,000 and $130,000, respectively. Current liabilities as of January 1 include a $74,000, 12%, 90-day note payable due March 20 and $7,000 of accounts payable incurred in December for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $4,400 in dividends will be received in January. An estimated income tax payment of $21,000 will be made in February. Shoe Mart's regular quarterly dividend of $7,000 is expected to be declared in February and paid in March. Management desires to maintain a minimum cash balance of $44,000. Required: 1. Prepare a monthly cash budget and supporting schedules for January, February, and March. Enter an increase in the month's cash balance or an excess cash amount as a positive number. Enter a decrease in the month's cash balance or a cash deficiency as a negative number. Assume 360 days per year for interest calculations. Shoe Mart Inc.Cash BudgetFor the Three Months Ending March 31

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 5PB: Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for...

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Cash Budget

The controller of Shoe Mart Inc. asks you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

	January	February	March
Sales	$148,000		$179,000	$238,000
Manufacturing costs	62,000		77,000	86,000
Selling and administrative expenses	43,000		48,000	52,000
Capital expenditures	_		_	57,000

The company expects to sell about 10% of its merchandise for cash. Of sales on account, 65% are expected to be collected in full in the month following the sale and the remainder the following month. Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in June, and the annual property taxes are paid in October. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. All sales and administrative expenses are paid in the month incurred.

Current assets as of January 1 include cash of $56,000, marketable securities of $80,000, and accounts receivable of $171,300 ($130,000 from December sales and $41,300 from November sales). Sales on account in November and December were $118,000 and $130,000, respectively. Current liabilities as of January 1 include a $74,000, 12%, 90-day note payable due March 20 and $7,000 of accounts payable incurred in December for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $4,400 in dividends will be received in January. An estimated income tax payment of $21,000 will be made in February. Shoe Mart's regular quarterly dividend of $7,000 is expected to be declared in February and paid in March. Management desires to maintain a minimum cash balance of $44,000.

Required:

1. Prepare a monthly cash budget and supporting schedules for January, February, and March. Enter an increase in the month's cash balance or an excess cash amount as a positive number. Enter a decrease in the month's cash balance or a cash deficiency as a negative number. Assume 360 days per year for interest calculations.

Shoe Mart Inc.Cash BudgetFor the Three Months Ending March 31

	January	February	March
Estimated cash receipts from:
Cash sales	$fill in the blank 5052aa05bf9a047_1	$fill in the blank 5052aa05bf9a047_2	$fill in the blank 5052aa05bf9a047_3
Collection of accounts receivable	fill in the blank 5052aa05bf9a047_4	fill in the blank 5052aa05bf9a047_5	fill in the blank 5052aa05bf9a047_6
Dividends	fill in the blank 5052aa05bf9a047_7	fill in the blank 5052aa05bf9a047_8	fill in the blank 5052aa05bf9a047_9
Total cash receipts	$fill in the blank 5052aa05bf9a047_10	$fill in the blank 5052aa05bf9a047_11	$fill in the blank 5052aa05bf9a047_12
Estimated cash payments for:
Manufacturing costs	$fill in the blank 5052aa05bf9a047_13	$fill in the blank 5052aa05bf9a047_14	$fill in the blank 5052aa05bf9a047_15
Selling and administrative expenses	fill in the blank 5052aa05bf9a047_16	fill in the blank 5052aa05bf9a047_17	fill in the blank 5052aa05bf9a047_18
Capital expenditures	fill in the blank 5052aa05bf9a047_19	fill in the blank 5052aa05bf9a047_20	fill in the blank 5052aa05bf9a047_21
Other purposes:
Note payable (including interest)	fill in the blank 5052aa05bf9a047_22	fill in the blank 5052aa05bf9a047_23	fill in the blank 5052aa05bf9a047_24
Income tax	fill in the blank 5052aa05bf9a047_25	fill in the blank 5052aa05bf9a047_26	fill in the blank 5052aa05bf9a047_27
Dividends	fill in the blank 5052aa05bf9a047_28	fill in the blank 5052aa05bf9a047_29	fill in the blank 5052aa05bf9a047_30
Total cash payments	$fill in the blank 5052aa05bf9a047_31	$fill in the blank 5052aa05bf9a047_32	$fill in the blank 5052aa05bf9a047_33
Cash increase (decrease)	$fill in the blank 5052aa05bf9a047_34	$fill in the blank 5052aa05bf9a047_35	$fill in the blank 5052aa05bf9a047_36
Cash balance at beginning of month	fill in the blank 5052aa05bf9a047_37	fill in the blank 5052aa05bf9a047_38	fill in the blank 5052aa05bf9a047_39
Cash balance at end of month	$fill in the blank 5052aa05bf9a047_40	$fill in the blank 5052aa05bf9a047_41	$fill in the blank 5052aa05bf9a047_42
Minimum cash balance	fill in the blank 5052aa05bf9a047_43	fill in the blank 5052aa05bf9a047_44	fill in the blank 5052aa05bf9a047_45
Excess (deficiency)	$fill in the blank 5052aa05bf9a047_46	$fill in the blank 5052aa05bf9a047_47	fill in the blank 5052aa05bf9a047_48

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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