repare Cash Budget For 3 Months Brewster Corporation expects the following cash receipts and disbursements during the first quarter of the year. (Receipts exclude new borrowings Dayments on borrowings since January 1.) January February March Cash receipts $260,000 $280,000 $250,000 Cash disbursements 240,000 320,000 260,000 The expected cash balance at January 1 is $42,000. Brewster wants to maintain a cash balance at the end of each month of at least $40,000. Short-term borrowings at 1% interest per month will be used to accomplish this, if necessary. Borrowings (in multiples of $1,000) will be made at the beginning of the month in which they are needed, with interest for that month paid at the end of the month. Prepare a cash budget for the quarter ended March 31. Brewster Corporation Cash Budget for the Quarter Ended March 31 January Beginning cash balance Cash receipts Short-term borrowings Cash available Cash disbursements Interest payment Total cash disbursements Fnding cash balance $ $ $ February $ $ $ $ $ $ $ March $

repare Cash Budget For 3 Months Brewster Corporation expects the following cash receipts and disbursements during the first quarter of the year. (Receipts exclude new borrowings Dayments on borrowings since January 1.) January February March Cash receipts $260,000 $280,000 $250,000 Cash disbursements 240,000 320,000 260,000 The expected cash balance at January 1 is $42,000. Brewster wants to maintain a cash balance at the end of each month of at least $40,000. Short-term borrowings at 1% interest per month will be used to accomplish this, if necessary. Borrowings (in multiples of $1,000) will be made at the beginning of the month in which they are needed, with interest for that month paid at the end of the month. Prepare a cash budget for the quarter ended March 31. Brewster Corporation Cash Budget for the Quarter Ended March 31 January Beginning cash balance Cash receipts Short-term borrowings Cash available Cash disbursements Interest payment Total cash disbursements Fnding cash balance $ $ $ February $ $ $ $ $ $ $ March $

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 20E

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

### Prepare Cash Budget For 3 Months

Brewster Corporation expects the following cash receipts and disbursements during the first quarter of the year. (Receipts exclude new borrowings and disbursements exclude interest payments on borrowings since January 1.)

| | January | February | March |
|--------------|----------|----------|----------|
| Cash receipts | $260,000 | $280,000 | $250,000 |
| Cash disbursements | 240,000 | 320,000 | 260,000 |

The expected cash balance at January 1 is $42,000. Brewster wants to maintain a cash balance at the end of each month of at least $40,000. Short-term borrowings at 1% interest per month will be used to accomplish this, if necessary. Borrowings (in multiples of $1,000) will be made at the beginning of the month in which they are needed, with interest for that month paid at the end of the month. Prepare a cash budget for the quarter ended March 31.

**Brewster Corporation
Cash Budget for the Quarter Ended March 31**

| | January | February | March |
|--------------------------|---------|----------|---------|
| Beginning cash balance | $ | $ | $ |
| Cash receipts | $ | $ | $ |
| Short-term borrowings | $ | $ | $ |
| Cash available | $ | $ | $ |
| Cash disbursements | $ | $ | $ |
| Interest payment | $ | $ | $ |
| Total cash disbursements | $ | $ | $ |
| Ending cash balance | $ | $ | $ |

This cash budget table is designed to help Brewster Corporation plan their financial operations by ensuring they have enough cash to cover disbursements each month, while keeping a minimum balance of $40,000. The table includes spaces for recording and calculating cash flows, borrowings, and interest payments, and emphasizes the importance of balancing receipts and expenditures to maintain sufficient operating cash.

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Cash Budget
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