Relevant data from the Poster Company’s operating budgets are: Quarter 1 Quarter 2 Sales $208,480 $211,540 Direct material purchases 115,300 120,832 Direct labor 75,205 73,298 Manufacturing overhead 25,300 25,400 Selling and administrative expenses 33,400 33,500 Depreciation included in selling and administrative 1,500 900 Collections from customers 215,392 240,154 Cash payments for purchases 114,290 119,254 Additional data: Capital assets were sold in January for $10,000 and $4,400 in May. Dividends of $4,600 were paid in February. The beginning cash balance was $60,360 and a required minimum cash balance is $59,000. Use this information to prepare a cash budget for the first two quarters of the year: If an amount box does not require an entry, leave it blank. The Poster CompanyCash BudgetFor the First Two Quarters Quarter 1 Quarter 2 $Beginning Cash Balance $Beginning Cash Balance Add: Cash Receipts Collections from Customers Collections from Customers Other Collections Other Collections Total Receipts $fill in the blank 10 $fill in the blank 11 Total Available Cash $fill in the blank 12 $fill in the blank 13 Less: Cash Payments Purchase of Direct Material Purchase of Direct Material Direct Labor Direct Labor Manufacturing Overhead Manufacturing Overhead Selling and Administrative Expenses Selling and Administrative Expenses Cash Dividend Cash Dividend Total Cash Payments $fill in the blank 29 $fill in the blank 30 Excess (Deficiency) of Available Cash Over Cash Disbursements $fill in the blank 31 $fill in the blank 32 Financing Add: Borrowings Add: Borrowings Less: Repayments Less: Repayments Ending cash balance $fill in the blank 39 $fill in the blank 40

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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Relevant data from the Poster Company’s operating budgets are:

	Quarter 1	Quarter 2
Sales	$208,480	$211,540
Direct material purchases	115,300	120,832
Direct labor	75,205	73,298
Manufacturing overhead	25,300	25,400
Selling and administrative expenses	33,400	33,500
Depreciation included in selling and administrative	1,500	900
Collections from customers	215,392	240,154
Cash payments for purchases	114,290	119,254

Additional data:
Capital assets were sold in January for $10,000 and $4,400 in May.
Dividends of $4,600 were paid in February. The beginning cash balance was $60,360 and a required minimum cash balance is $59,000.

Use this information to prepare a cash budget for the first two quarters of the year: If an amount box does not require an entry, leave it blank.

The Poster CompanyCash BudgetFor the First Two Quarters

	Quarter 1	Quarter 2
	$Beginning Cash Balance	$Beginning Cash Balance
Add: Cash Receipts
	Collections from Customers	Collections from Customers
	Other Collections	Other Collections
Total Receipts	$fill in the blank 10	$fill in the blank 11
Total Available Cash	$fill in the blank 12	$fill in the blank 13
Less: Cash Payments
	Purchase of Direct Material	Purchase of Direct Material
	Direct Labor	Direct Labor
	Manufacturing Overhead	Manufacturing Overhead
	Selling and Administrative Expenses	Selling and Administrative Expenses
	Cash Dividend	Cash Dividend
Total Cash Payments	$fill in the blank 29	$fill in the blank 30
Excess (Deficiency) of Available Cash Over Cash Disbursements	$fill in the blank 31	$fill in the blank 32
Financing
	Add: Borrowings	Add: Borrowings
	Less: Repayments	Less: Repayments
Ending cash balance	$fill in the blank 39	$fill in the blank 40

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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