Prepare a cash budget for January and February in columnar form. Please answer in detail with all working please answer in text not image

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Prepare a cash budget for January and February in columnar form. Please answer in detail with all working please answer in text not image

 

(a)
Your answer is correct.
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for
January and February.
November
December
January
February
Total collections
December
January
February
Total payments
Expected Collections from Customers
January
19
$
65000
January
124800
234000
Expected Payments for Direct Materials
423800
$
52000 $
93600
145600
S
February
February
83200
140400
260000
483600
62400
97500
159900
Transcribed Image Text:(a) Your answer is correct. Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February. November December January February Total collections December January February Total payments Expected Collections from Customers January 19 $ 65000 January 124800 234000 Expected Payments for Direct Materials 423800 $ 52000 $ 93600 145600 S February February 83200 140400 260000 483600 62400 97500 159900
Wildhorse Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows.
Sales
Direct materials purchases
Direct labor
Manufacturing overhead
91,000
Selling and administrative expenses 102,700
All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct
materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and
administrative expenses that include $1,300 of depreciation per month.
Other data:
1
2
3
4.
(a)
Credit sales: November 2021, $325,000: December 2021, $416,000.
Purchases of direct materials: December 2021, $130,000.
Other receipts: January-Collection of December 31, 2021, notes receivable $19.500; February-Proceeds from sale of securities $7,800.
Other disbursements: February-Payment of $7,800 cash dividend.
The company's cash balance on January 1, 2022, is expected to be $78,000. The company wants to maintain a minimum cash balance of $65,000.
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.
November
January
February
$468,000 $520,000
156,000 162,500
117,000
130,000
97,500
110,500
December
January
February
Expected Collections from Customers
January
$
Total collections $
$
February
Ac
Go
Transcribed Image Text:Wildhorse Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows. Sales Direct materials purchases Direct labor Manufacturing overhead 91,000 Selling and administrative expenses 102,700 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,300 of depreciation per month. Other data: 1 2 3 4. (a) Credit sales: November 2021, $325,000: December 2021, $416,000. Purchases of direct materials: December 2021, $130,000. Other receipts: January-Collection of December 31, 2021, notes receivable $19.500; February-Proceeds from sale of securities $7,800. Other disbursements: February-Payment of $7,800 cash dividend. The company's cash balance on January 1, 2022, is expected to be $78,000. The company wants to maintain a minimum cash balance of $65,000. Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February. November January February $468,000 $520,000 156,000 162,500 117,000 130,000 97,500 110,500 December January February Expected Collections from Customers January $ Total collections $ $ February Ac Go
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