**Sonoma Housewares, Inc. Cash Budget***For the Three Months Ending July 31, 2021*This document presents the estimated cash budget for Sonoma Housewares, Inc. spanning the months of May, June, and July 2021. The budget is structured to detail both cash inflows and outflows, along with calculations for changes in cash balance over this period.### Estimated Cash Receipts:- **Cash sales**: Expected cash received from sales.- **Collection of accounts receivable**: Cash expected from outstanding invoices.**Total Cash Receipts**: This is the sum of cash sales and the collection of accounts receivable.### Estimated Cash Payments:- **Manufacturing costs**: Payments related to production costs.- **Selling and administrative expenses**: Payments for operational and administrative expenses.- **Capital expenditures**: Payments for long-term investments or purchases.- **Other purposes**: - **Income tax**: Estimated tax payments. - **Dividends**: Payments made to stockholders.**Total Cash Payments**: Cumulative total of all estimated cash outflows.### Cash Flow Calculation:- **Cash increase or (decrease)**: The net change in cash, calculated by subtracting total cash payments from total cash receipts.- **Cash balance at beginning of month**: Starting cash balance at the start of each month.- **Cash balance at end of month**: Ending cash balance after accounting for the cash increase or decrease.- **Minimum cash balance**: Required minimum amount of cash to be maintained.- **Excess or (deficiency)**: The difference between the cash balance at the end of the month and the minimum cash balance.This cash budget template helps in assessing the financial planning and liquidity of the company over the three-month period. The shaded columns represent cells in the spreadsheet that may require formula computations, as indicated by the "Formula Bar" label. **PR 22-4A Cash Budget**The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:| | May | June | July ||------------------|-------|-------|-------|| Sales | $86,000 | $90,000 | $95,000 || Manufacturing costs | 34,000 | 39,000 | 44,000 || Selling and administrative expenses | 15,000 | 16,000 | 22,000 || Capital expenditures | - | - | 80,000 |The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $3,500 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.Current assets as of May 1 include cash of $33,000, marketable securities of $40,000, and accounts receivable of $90,000 ($72,000 from April sales and $18,000 from March sales). Sales on account for March and April were $60,000 and $72,000, respectively. Current liabilities as of May 1 include $6,000 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $14,000 will be made in June. Sonoma’s regular quarterly dividend of $5,000 is expected to be declared in June and paid in July. Management desires to maintain a minimum cash balance of $30,000.**Instructions:**1. Prepare a monthly cash budget and supporting schedules for May, June, and July 2016.

Solution 1: Computation of Collection from Customer Particulars May June July Collection for…

The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash bu get for the next three months. You are presented with the following budget information May June July Sales .. $86,000 $90,000 $95,000 Manufacturing costs.. Selling and administrative expenses . Capital expenditures 34,000 39,000 44,000 15,000 16,000 22,000 80,000 The company expects to sell about 10% of its merchandise for cash. Of sales c account, 70% are expected to be collected in the month following the sale and the r

The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash bu get for the next three months. You are presented with the following budget information May June July Sales .. $86,000 $90,000 $95,000 Manufacturing costs.. Selling and administrative expenses . Capital expenditures 34,000 39,000 44,000 15,000 16,000 22,000 80,000 The company expects to sell about 10% of its merchandise for cash. Of sales c account, 70% are expected to be collected in the month following the sale and the r

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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