Floss Company has $13,000 in cash on hand on January 1 and has collected the following budget data. Assume Floss has cash payments for selling and administrative expenses including salaries of $66,000 plus commissions of 2% of sales, all paid in the month of sale. The company requires a minimum cash balance of $11,000. Prepare a cash budget for January and February. Will Floss need to borrow cash by the end of February? Beginning bye preparing the cash budget for January, then the cash budget for February. (Complete all input fields. Enter a “0” for any zero balances. ) Data Table- XJanuaryFebruarySales1,300,000 S650,000Cash receipts from customers851.850871,900Cash payments for merchandise inventory561,300532,278PrintDone then prepare the cash budget for FebruFloss CompanyCash BudgetTwo Months Ended January 31 and February 28JanuaryBeginning cash balance2$13,000Cash receipts851,850Cash available864,850Cash payments:Purchases of merchandise inventory561,300Selling and administrative expenses66,000Total cash payments26,000Ending cash balance before financing211,550(11,000)Minimum cash balance desired200,550Projected cash excess (deficiency)Financing:BorrowingPrincipal repaymentsTotal effects of financingEnding cash balance

Selling and administrative expenses = $ 66000 + 2% of sales For January , Sales = $ 1300000 Selling…

Answered: Floss Company has $13,000 in cash on…

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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Floss Company has $13,000 in cash on hand on January 1 and has collected the following budget data. Assume Floss has cash payments for selling and administrative expenses including salaries of $66,000 plus commissions of 2% of sales, all paid in the month of sale. The company requires a minimum cash balance of $11,000. Prepare a cash budget for January and February. Will Floss need to borrow cash by the end of February? Beginning bye preparing the cash budget for January, then the cash budget for February. (Complete all input fields. Enter a “0” for any zero balances. )

Data Table
- X
January
February
Sales
1,300,000 S
650,000
Cash receipts from customers
851.850
871,900
Cash payments for merchandise inventory
561,300
532,278
Print
Done

then prepare the cash budget for Febru
Floss Company
Cash Budget
Two Months Ended January 31 and February 28
January
Beginning cash balance
2$
13,000
Cash receipts
851,850
Cash available
864,850
Cash payments:
Purchases of merchandise inventory
561,300
Selling and administrative expenses
66,000
Total cash payments
26,000
Ending cash balance before financing
211,550
(11,000)
Minimum cash balance desired
200,550
Projected cash excess (deficiency)
Financing:
Borrowing
Principal repayments
Total effects of financing
Ending cash balance

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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