Robert Williams, Marigold & Michael Fabricators' budget director, has received budget information from several managers and is preparing the company's cash budget. January February March Quarter Collections from sales 477,200 560,860 637,720 1,675,780 Payments for direct materials 80,505 253,125 274,730 608,360 Payments for direct labor 98,640 103,680 116,640 318,960 Payments for manufacturing overheads 78,490 78,980 80,240 237,710 Payments for Selling & administrative expenses 111,400 116,440 123,160 351,000 In addition to the information he received from these managers, Robert knows the following: Marigold & Michael plans to have $32,400 in its cash account on January 1 Marigold & Michael plans to purchase and pay cash for a piece of land in January at a cost of $86,000. Marigold & Michael plans to make a cash purchase of equipment in March at a cost of $31,000. Marigold &. Michael's income taxes from last quarter totaling $26,400 will be paid in January. Marigold & Michael is required to maintain a minimum cash balance of $50,000 in its account at First National Bank. Marigold & Michael has negotiated with the First National Bank to provide a $175,000 line of credit that can be borrowed against in $1,000 increments on the first day of the month. Any repayments on the line of credit must also be made in $1,000 increments and are made on the last day of the month when cash is available. The annual interest rate on this line of credit is 6%. Any tỉme a principal payment is made, all accrued interest to date is repaid.
Robert Williams, Marigold & Michael Fabricators' budget director, has received budget information from several managers and is preparing the company's cash budget. January February March Quarter Collections from sales 477,200 560,860 637,720 1,675,780 Payments for direct materials 80,505 253,125 274,730 608,360 Payments for direct labor 98,640 103,680 116,640 318,960 Payments for manufacturing overheads 78,490 78,980 80,240 237,710 Payments for Selling & administrative expenses 111,400 116,440 123,160 351,000 In addition to the information he received from these managers, Robert knows the following: Marigold & Michael plans to have $32,400 in its cash account on January 1 Marigold & Michael plans to purchase and pay cash for a piece of land in January at a cost of $86,000. Marigold & Michael plans to make a cash purchase of equipment in March at a cost of $31,000. Marigold &. Michael's income taxes from last quarter totaling $26,400 will be paid in January. Marigold & Michael is required to maintain a minimum cash balance of $50,000 in its account at First National Bank. Marigold & Michael has negotiated with the First National Bank to provide a $175,000 line of credit that can be borrowed against in $1,000 increments on the first day of the month. Any repayments on the line of credit must also be made in $1,000 increments and are made on the last day of the month when cash is available. The annual interest rate on this line of credit is 6%. Any tỉme a principal payment is made, all accrued interest to date is repaid.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:January
February
March
Quarter
24
$
24
24
24
Transcribed Image Text:Robert Williams, Marigold & Michael Fabricators' budget director, has received budget information from several managers and is
preparing the company's cash budget.
January
February
March
Quarter
Collections from sales
477,200
560,860
637,720
1,675,780
Payments for direct materials
80,505
253,125
274,730
608,360
Payments for direct labor
98,640
103,680
116,640
318,960
Payments for manufacturing overheads
78,490
78,980
80,240
237,710
Payments for Selling & administrative expenses
111,400
116,440
123,160
351,000
In addition to the information he received from these managers, Robert knows the following:
Marigold & Michael plans to have $32,400 in its cash account on January 1.
Marigold & Michael plans to purchase and pay cash for a piece of land in January at a cost of $86,000.
Marigold & Michael plans to make a cash purchase of equipment in March at a cost of $31,000.
Marigold & Michael's income taxes from last quarter totaling $26,400 will be paid in January.
Marigold & Michael is required to maintain a minimum cash balance of $50,000 in its account at First National Bank.
Marigold & Michael has negotiated with the First National Bank to provide a $175,000 line of credit that can be borrowed against in
$1,000 increments on the first day of the month. Any repayments on the line of credit must also be made in $1,000 increments and are
made on the last day of the month when cash is available. The annual interest rate on this line of credit is 6%. Any time a principal
payment is made, all accrued interest to date is repaid.
Prepare Marigold & Hill's cash budget for the first quarter. (Round answers to 0 decimal places, e.g. 5,275. Enter answers in necessary fields
only. Leave other fields blank. Do not enter 0. Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses
eg. (45).)
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