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Required: 1. Compute the budgeted cash receipts for Iguana. 2. Compute the budgeted cash payments for Iguana. 3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $10,000 minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter.

Required: 1. Compute the budgeted cash receipts for Iguana. 2. Compute the budgeted cash payments for Iguana. 3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $10,000 minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter.

FINANCIAL ACCOUNTING
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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Iguana, Incorporated, manufactures bamboo picture frames that sell for $30 each. Each frame requires 4 linear feet of bamboo, which costs $2.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12 per hour. Iguana has the following inventory policies: .Ending finished goods inventory should be 40 percent of next month's sales. • Ending direct materials inventory should be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months follow: March April May June July August 280 260 310 410 385 435 Variable manufacturing overhead is incurred at a rate of $0.40 per unit produced. Annual fixed manufacturing overhead is estimated to be $7,800 ($650 per month) for expected production of 3,000 units for the year. Selling and administrative expenses are estimated at $700 per month plus $0.50 per unit sold. Iguana, Incorporated, had $10,900 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50 percent is collected during the month of the sale, and 50 percent is collected during the month following the sale. Of direct materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Direct materials purchases for March 1 totaled $2,500. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $160 in depreciation. During April, Iguana plans to pay $3,100 for a piece of equipment. Show Transcribed Text paid in the following month. Direct materials purchases for March 1 totaled $2,500. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $160 in depreciation. During April, Iguana plans to pay $3,100 for a piece of equipment. Required: 1. Compute the budgeted cash receipts for Iguana. 2. Compute the budgeted cash payments for Iguana. 3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $10,000 minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter. Complete this question by entering your answers in the tabs below. Budgeted Cash Receipts Required 1 Required 2 Required 3 Compute the budgeted cash receipts for Iguana. Note: Do not round your intermediate calculations. Round final answers to 2 decimal places. April May < Required 1 June 2nd Quarter Total $ 0.00 Required 2 >
Transcribed Image Text:Iguana, Incorporated, manufactures bamboo picture frames that sell for $30 each. Each frame requires 4 linear feet of bamboo, which costs $2.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12 per hour. Iguana has the following inventory policies: .Ending finished goods inventory should be 40 percent of next month's sales. • Ending direct materials inventory should be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months follow: March April May June July August 280 260 310 410 385 435 Variable manufacturing overhead is incurred at a rate of $0.40 per unit produced. Annual fixed manufacturing overhead is estimated to be $7,800 ($650 per month) for expected production of 3,000 units for the year. Selling and administrative expenses are estimated at $700 per month plus $0.50 per unit sold. Iguana, Incorporated, had $10,900 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50 percent is collected during the month of the sale, and 50 percent is collected during the month following the sale. Of direct materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Direct materials purchases for March 1 totaled $2,500. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $160 in depreciation. During April, Iguana plans to pay $3,100 for a piece of equipment. Show Transcribed Text paid in the following month. Direct materials purchases for March 1 totaled $2,500. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $160 in depreciation. During April, Iguana plans to pay $3,100 for a piece of equipment. Required: 1. Compute the budgeted cash receipts for Iguana. 2. Compute the budgeted cash payments for Iguana. 3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $10,000 minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter. Complete this question by entering your answers in the tabs below. Budgeted Cash Receipts Required 1 Required 2 Required 3 Compute the budgeted cash receipts for Iguana. Note: Do not round your intermediate calculations. Round final answers to 2 decimal places. April May < Required 1 June 2nd Quarter Total $ 0.00 Required 2 >
minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the budgeted cash payments for Iguana. Note: Do not round your intermediate calculations. Round final answers to 2 decimal places. May Budgeted Cash Payments nscribed Text April < Required 1 Beginning Cash Balance Plus: Budgeted Cash Receipts Less: Budgeted Cash Payments Preliminary Cash Balance Cash Borrowed/Repaid June 2nd Quarter Total 0.00 yes no AS minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter. Complete this question by entering your answers in the tabs below. Required 3 > April Company can borrow in increments of 1,000 to maintain a $10,000 Required 1 Required 2 Required 3 Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $10,000 minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter. Note: Leave no cell blank enter "0" wherever required. Round your answers to 2 decimal places. May 2nd Quarter Total June 0.00 0.00
Transcribed Image Text:minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the budgeted cash payments for Iguana. Note: Do not round your intermediate calculations. Round final answers to 2 decimal places. May Budgeted Cash Payments nscribed Text April < Required 1 Beginning Cash Balance Plus: Budgeted Cash Receipts Less: Budgeted Cash Payments Preliminary Cash Balance Cash Borrowed/Repaid June 2nd Quarter Total 0.00 yes no AS minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter. Complete this question by entering your answers in the tabs below. Required 3 > April Company can borrow in increments of 1,000 to maintain a $10,000 Required 1 Required 2 Required 3 Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $10,000 minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter. Note: Leave no cell blank enter "0" wherever required. Round your answers to 2 decimal places. May 2nd Quarter Total June 0.00 0.00
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