Answered: Given the following information,…

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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Question

Given the following information, complete the cash budget:

Collections occur one month after the sale.
January’s credit sales were $90,000.
The firm has a certificate of deposit for $50,000 that matures in April.
Salaries are $150,000 a month.
The monthly mortgage payment is $20,000.
Monthly depreciation is $10,000.
Property tax of $35,000 is due in February.

Round your answers to the nearest dollar. Enter the disbursements values as positive values. Use a minus sign to enter shortage of cash, negative beginning and ending cash values, if any. Do not leave any cells blank. If the answer is zero, enter "0".

		February		March		April
Sales	$	170,000	$	200,000	$	230,000
Cash sales	$	35,000	$	20,000	$	70,000
Collections	$		$		$
Other receipts	$		$		$
Total cash receipts	$		$		$
Salaries	$		$		$
Mortgage	$		$		$
Other disbursements	$		$		$
Total cash disbursements	$		$		$
Net change during the month	$		$		$
Beginning cash	$	30,000	$		$
Ending cash	$		$		$
Required level of cash	$	14,000	$	14,000	$	14,000
Excess cash or (shortage)	$		$		$

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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