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Consider the following information about Elmwood Manufacturing Company: Estimated Estimated Factory Estimated Selling and Month Sales Overhead Administrative Expenses December Year 1 $4,000,000 $650,000 $1,230,000 January Year 2 3,500,000 700,000 1,270,000 February Year 2 10,600,000 650,000 1,330,000 March Year 2 4,000,000 680,000 1,220,000 April Year 2 1,550,000 610,000 1,255,000 The company has found that approximately 30 percent of sales are collected during the month the sale is made and the remaining 70 percent are collected during the month following the sale. Material purchases are 30 percent of next month's estimated sales, and payments lag these purchases by one month. Labor costs are 35 percent of next month's sales and are paid during the month incurred. Factory overhead and selling and administrative expenses are paid during the month incurred. In addition, a payment for new equipment of $1.2 million is due in February. Also, a tax payment of $1.9 million and a dividend payment of $660,000 are due in March. The company's projected cash balance at the beginning of January is $1.5 million. Furthermore, Elmwood desires to maintain a $750,000 cash balance at the end of each month. Prepare a cash budget for Elmwood Manufacturing Company for the first three months of Year 2. Enter your answers as positive values, but use minus sign to indicate the lack of available cash. Enter zero if necessary. Do not leave any cells blank. Round your answers to the nearest dollar. Cash Budget First Quarter, Year 2 December January February March April Sales 24 24 Projected cash balance, $ $ beginning of month

Consider the following information about Elmwood Manufacturing Company: Estimated Estimated Factory Estimated Selling and Month Sales Overhead Administrative Expenses December Year 1 $4,000,000 $650,000 $1,230,000 January Year 2 3,500,000 700,000 1,270,000 February Year 2 10,600,000 650,000 1,330,000 March Year 2 4,000,000 680,000 1,220,000 April Year 2 1,550,000 610,000 1,255,000 The company has found that approximately 30 percent of sales are collected during the month the sale is made and the remaining 70 percent are collected during the month following the sale. Material purchases are 30 percent of next month's estimated sales, and payments lag these purchases by one month. Labor costs are 35 percent of next month's sales and are paid during the month incurred. Factory overhead and selling and administrative expenses are paid during the month incurred. In addition, a payment for new equipment of $1.2 million is due in February. Also, a tax payment of $1.9 million and a dividend payment of $660,000 are due in March. The company's projected cash balance at the beginning of January is $1.5 million. Furthermore, Elmwood desires to maintain a $750,000 cash balance at the end of each month. Prepare a cash budget for Elmwood Manufacturing Company for the first three months of Year 2. Enter your answers as positive values, but use minus sign to indicate the lack of available cash. Enter zero if necessary. Do not leave any cells blank. Round your answers to the nearest dollar. Cash Budget First Quarter, Year 2 December January February March April Sales 24 24 Projected cash balance, $ $ beginning of month

FINANCIAL ACCOUNTING
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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Loan repayment   $    $    $ 
Projected cash balance,              
      end of month   $    $    $ 
Receipts: Collection of A/R Total cash available $ $ Disbursements Payments of A/P $ 24 24 Labor expenses Factory overhead Selling and adm. expenses Taxes Dividends Purchase of new equipment Total disbursements $ $ $ Excess of available cash over disbursements Incremental cash loans needed to maintain a balance of $750,000 $ $ 24
Transcribed Image Text:Receipts: Collection of A/R Total cash available $ $ Disbursements Payments of A/P $ 24 24 Labor expenses Factory overhead Selling and adm. expenses Taxes Dividends Purchase of new equipment Total disbursements $ $ $ Excess of available cash over disbursements Incremental cash loans needed to maintain a balance of $750,000 $ $ 24
Consider the following information about Elmwood Manufacturing Company: Estimated Estimated Factory Estimated Selling and Month Sales Overhead Administrative Expenses December Year 1 $4,000,000 $650,000 $1,230,000 January Year 2 3,500,000 700,000 1,270,000 February Year 2 10,600,000 650,000 1,330,000 March Year 2 4,000,000 680,000 1,220,000 April Year 2 1,550,000 610,000 1,255,000 The company has found that approximately 30 percent of sales are collected during the month the sale is made and the remaining 70 percent are collected during the month following the sale. Material purchases are 30 percent of next month's estimated sales, and payments lag these purchases by one month. Labor costs are 35 percent of next month's sales and are paid during the month incurred. Factory overhead and selling and administrative expenses are paid during the month incurred. In addition, a payment for new equipment of $1.2 million is due in February. Also, a tax payment of $1.9 million and a dividend payment of $660,000 are due in March. The company's projected cash balance at the beginning of January is $1.5 million. Furthermore, Elmwood desires to maintain a $750,000 cash balance at the end of each month. Prepare a cash budget for Elmwood Manufacturing Company for the first three months of Year 2. Enter your answers as positive values, but use minus sign to indicate the lack of available cash. Enter zero if necessary. Do not leave any cells blank. Round your answers to the nearest dollar. Cash Budget First Quarter, Year 2 December January February March April Sales $ 2$ $ $ 2$ Projected cash balance, 2$ 24 $ beginning of month
Transcribed Image Text:Consider the following information about Elmwood Manufacturing Company: Estimated Estimated Factory Estimated Selling and Month Sales Overhead Administrative Expenses December Year 1 $4,000,000 $650,000 $1,230,000 January Year 2 3,500,000 700,000 1,270,000 February Year 2 10,600,000 650,000 1,330,000 March Year 2 4,000,000 680,000 1,220,000 April Year 2 1,550,000 610,000 1,255,000 The company has found that approximately 30 percent of sales are collected during the month the sale is made and the remaining 70 percent are collected during the month following the sale. Material purchases are 30 percent of next month's estimated sales, and payments lag these purchases by one month. Labor costs are 35 percent of next month's sales and are paid during the month incurred. Factory overhead and selling and administrative expenses are paid during the month incurred. In addition, a payment for new equipment of $1.2 million is due in February. Also, a tax payment of $1.9 million and a dividend payment of $660,000 are due in March. The company's projected cash balance at the beginning of January is $1.5 million. Furthermore, Elmwood desires to maintain a $750,000 cash balance at the end of each month. Prepare a cash budget for Elmwood Manufacturing Company for the first three months of Year 2. Enter your answers as positive values, but use minus sign to indicate the lack of available cash. Enter zero if necessary. Do not leave any cells blank. Round your answers to the nearest dollar. Cash Budget First Quarter, Year 2 December January February March April Sales $ 2$ $ $ 2$ Projected cash balance, 2$ 24 $ beginning of month
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