Make a cash budget for fire ltd. for the march and april month

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 18E
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Make a cash budget for fire ltd. for the march and april month 

 

Management for Fire Ltd. has buderted the following
Monthly sales
Cash payments for purchases of inventory
Sellieg and administrative expenses
Additional information:
February
$525.000
287,000
67.000
March
$515.000
283.000
64000
Apri
$530,000
290,000
65.000
* The Company has already prepared a schedule of cash collections and expects that cash
collected from all cash and credit sales will be $315,000 in March and $400,000 in April
* Inventory purchases are paid for in the month after they are incurred.
*Seling and administrative expenses are pald in the month incurred and include monthly depres
of $10.000.
* The company is epectied to buy equipment costing $120.000. They will pay a cash deposit
of 56.000 in March, 512.000 in April, and the remaining balance in lune.
* Dividends of $35.000 will be declared and paid in April.
* Cash balance on March 1" is $28,000.
•A minimum balance of $12.000 is required at the end of March and April and the company
will borrow cash to ensure this minimum balance at the end of each month.
Regret Comlete fdh budiget for she monhf Manth e Ain the tale temtatven et
if y deily dulee thele, pr rdandtheaeshdreappar doett cont
with the ank page nd ty yr an ear a ple
DOLSSOD
Transcribed Image Text:Management for Fire Ltd. has buderted the following Monthly sales Cash payments for purchases of inventory Sellieg and administrative expenses Additional information: February $525.000 287,000 67.000 March $515.000 283.000 64000 Apri $530,000 290,000 65.000 * The Company has already prepared a schedule of cash collections and expects that cash collected from all cash and credit sales will be $315,000 in March and $400,000 in April * Inventory purchases are paid for in the month after they are incurred. *Seling and administrative expenses are pald in the month incurred and include monthly depres of $10.000. * The company is epectied to buy equipment costing $120.000. They will pay a cash deposit of 56.000 in March, 512.000 in April, and the remaining balance in lune. * Dividends of $35.000 will be declared and paid in April. * Cash balance on March 1" is $28,000. •A minimum balance of $12.000 is required at the end of March and April and the company will borrow cash to ensure this minimum balance at the end of each month. Regret Comlete fdh budiget for she monhf Manth e Ain the tale temtatven et if y deily dulee thele, pr rdandtheaeshdreappar doett cont with the ank page nd ty yr an ear a ple DOLSSOD
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