Here is an information regarding the relevant PDC company policies• The building rent is fixed at a monthly rate of $ 4,600. In the period January - June 2019 PDC The company decided not to buy trucks (fixed assets) anymore. Loan interest 1.5% per month applies. Payment of loan installments and interest is made at the end month. Depreciation expense is $ 1,150 per month. The minimum cash balance $23.000. Insurance expense per month is $ 460. PDC Company prepaid insurance, the balance is deducted automatically per month for $ 460. After the insurance balance is prepaid the value is 0, the new PDC company will make insurance repayments for 1 year. For the sake of simplicity of calculation, hence tax calculations are not included in this case study.Based on the information above and some additional information below, do it following instructions:a. Prepare the cash budget from January - June 2019. (A) SALES SCHEDULEDECEMBERJANUARYFEBRUARYMARCHAPRILMAYJUNEJULYSchedule 1: SalesForecast160,000700,000900,0001,000,0001,100,0001,400,0001,500,0001,700,000Credit sales 40%64,000280,000360,000400,000440,000560,000600,000680,000Cash sales 60%96,000420,000540,000600,000660,000840,000900,0001,020,000Scehdule 2: CashCollectionsCash sales this month's420,000540,000600,000660,000840,000900,0001,020,000100% of last month's credit sales64,000280,000360,000400,000440,000560,000600,000Total collections484,000820,000960,0001,060,0001,280,0001,460,0001,620,000(B) PURCHASE SCHEDULEDECEMBERJANUARYFEBRUARYMARCHAPRILMAYJUNESchedule 3: PurchasesEnding inventory152,400550,000606,000662,000830,000886,000998,000Cost of goods sold112,000490,000630,000700,000770,000980,0001,050,000Total needed264,4001,040,0001,236,0001,362,000,600,0001,866,0002,048,000Beginning inventory135,600152,400550,000606,000662,000830,000886,000Purchases128,800887,600686,000756,000938,0001,036,0001,162,000Schedule 4: PurchaseDisbursements50% of last month's purchases64,400443,800343,000378,000469,000518,00050% of this month's purchases443,800343,000378,000469,000518,000581,000Disbursements for purchases508,200786,800721,000847,000987,0001,099,000(C) WAGES AND COMMISIONS SCHEDULEDECEMBERJANUARYFEBRUARYMARCHAPRILMAYJUNESchedule 5: Wages and CommisionsWages, all fixedCommisions (15% of current sales)5,7505,7505,7505,7505,7505,7505,75024,000105,000135,000150,000165,000210,000225,000Total29,750110,750140,750155,750170,750215,750230,750Schedule 6: Disbursements Wages50% of last month's expenses14,87555,37570,37577,87585,375107,87550% of this month's expenses55,37570,37577,87585,375107,875115,375Total70,250125,750148,250163,250193,250223,250

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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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Here is an information regarding the relevant PDC company policies • The building rent is fixed at a monthly rate of $ 4,600. In the period January - June 2019 PDC The company decided not to buy trucks (fixed assets) anymore. Loan interest 1.5% per month applies. Payment of loan installments and interest is made at the end month. Depreciation expense is $ 1,150 per month. The minimum cash balance $23.000. Insurance expense per month is $ 460. PDC Company prepaid insurance, the balance is deducted automatically per month for $ 460. After the insurance balance is prepaid the value is 0, the new PDC company will make insurance repayments for 1 year. For the sake of simplicity of calculation, hence tax calculations are not included in this case study. Based on the information above and some additional information below, do it following instructions: a. Prepare the cash budget from January - June 2019.

(A) SALES SCHEDULE
DECEMBER
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
JULY
Schedule 1: Sales
Forecast
160,000
700,000
900,000
1,000,000
1,100,000
1,400,000
1,500,000
1,700,000
Credit sales 40%
64,000
280,000
360,000
400,000
440,000
560,000
600,000
680,000
Cash sales 60%
96,000
420,000
540,000
600,000
660,000
840,000
900,000
1,020,000
Scehdule 2: Cash
Collections
Cash sales this month's
420,000
540,000
600,000
660,000
840,000
900,000
1,020,000
100% of last month's credit sales
64,000
280,000
360,000
400,000
440,000
560,000
600,000
Total collections
484,000
820,000
960,000
1,060,000
1,280,000
1,460,000
1,620,000
(B) PURCHASE SCHEDULE
DECEMBER
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
Schedule 3: Purchases
Ending inventory
152,400
550,000
606,000
662,000
830,000
886,000
998,000
Cost of goods sold
112,000
490,000
630,000
700,000
770,000
980,000
1,050,000
Total needed
264,400
1,040,000
1,236,000
1,362,000
,600,000
1,866,000
2,048,000
Beginning inventory
135,600
152,400
550,000
606,000
662,000
830,000
886,000
Purchases
128,800
887,600
686,000
756,000
938,000
1,036,000
1,162,000
Schedule 4: Purchase
Disbursements
50% of last month's purchases
64,400
443,800
343,000
378,000
469,000
518,000
50% of this month's purchases
443,800
343,000
378,000
469,000
518,000
581,000
Disbursements for purchases
508,200
786,800
721,000
847,000
987,000
1,099,000
(C) WAGES AND COMMISIONS SCHEDULE
DECEMBER
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
Schedule 5: Wages and Commisions
Wages, all fixed
Commisions (15% of current sales)
5,750
5,750
5,750
5,750
5,750
5,750
5,750
24,000
105,000
135,000
150,000
165,000
210,000
225,000
Total
29,750
110,750
140,750
155,750
170,750
215,750
230,750
Schedule 6: Disbursements Wages
50% of last month's expenses
14,875
55,375
70,375
77,875
85,375
107,875
50% of this month's expenses
55,375
70,375
77,875
85,375
107,875
115,375
Total
70,250
125,750
148,250
163,250
193,250
223,250

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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