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The treasurer of Company has accumulated the following budget information for the first two months of the coming year: March $450,000 290,000 Аpril $520,000 Sales. Manufacturing costs Selling and administrative expenses Capital additions 350,000 46,400 41,400 250,000 The company expects to sell about 35% of its merchandise for cash. Of sales on account, 80% are expected to be collected in full in the month of the sale and the remainder in the month following the sale. One-fourth of the manufacturing costs are expected to be paid in the month in which they are incurred and the other three-fourths in the following month. Depreciation, insurance, and property taxes represent $6.400 of the probable monthly selling and administrative expenses. Insurance is paid in February and a $40,000 installment on income taxes is expected to be paid in April. Of the remainder of the selling and administrative expenses, one-half are expected to be paid in the month in which they are incurred and the balance in the following month. Capital additions of $250,000 are expected to be paid in March. Current assets as of March 1 are composed of cash of $45,000 and accounts receivable of $51,000. Current liabilities as of March 1 are composed of accounts payable of $121,500($102,000 for materials purchases and $19,500 for operating expenses). Management desires to maintain a minimum cash balance of $20,000. Q. Prepare a monthly cash budget for March and April.

The treasurer of Company has accumulated the following budget information for the first two months of the coming year: March $450,000 290,000 Аpril $520,000 Sales. Manufacturing costs Selling and administrative expenses Capital additions 350,000 46,400 41,400 250,000 The company expects to sell about 35% of its merchandise for cash. Of sales on account, 80% are expected to be collected in full in the month of the sale and the remainder in the month following the sale. One-fourth of the manufacturing costs are expected to be paid in the month in which they are incurred and the other three-fourths in the following month. Depreciation, insurance, and property taxes represent $6.400 of the probable monthly selling and administrative expenses. Insurance is paid in February and a $40,000 installment on income taxes is expected to be paid in April. Of the remainder of the selling and administrative expenses, one-half are expected to be paid in the month in which they are incurred and the balance in the following month. Capital additions of $250,000 are expected to be paid in March. Current assets as of March 1 are composed of cash of $45,000 and accounts receivable of $51,000. Current liabilities as of March 1 are composed of accounts payable of $121,500($102,000 for materials purchases and $19,500 for operating expenses). Management desires to maintain a minimum cash balance of $20,000. Q. Prepare a monthly cash budget for March and April.

Managerial Accounting
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 5PB: Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for...
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The treasurer of Company has accumulated the following budget information for the first two months of the coming year: March $450,000 April $520,000 Sales. Manufacturing costs Selling and administrative expenses Capital additions 290,000 350,000 41,400 46,400 250,000 The company expects to sell about 35% of its merchandise for cash. Of sales on و ه و و ی م ه م ی ه م ش گو ن کی وو می ش م account, 80% are expected to be collected in full in the month of the sale and the remainder in the month following the sale. One-fourth of the manufacturing costs are expected to be paid in the month in which they are incurred and the other وی شو و ی و ی ه و ه و ی و م م م م مو م م م م مه مه م م three-fourths in the following month. Depreciation, insurance, and property taxes represent $6.400 of the probable monthly selling and administrative expenses. Insurance is paid in February and a $40,000 installment on income taxes is expected to be paid in April. Of the remainder of the selling and administrative expenses, one-half are expected to be paid in the month in which they are incurred and the balance in the following month. Capital additions of $250,000 are expected to be paid in March. Current assets as of March 1 are composed of cash of $45,000 and accounts receivable of $51,000. Current liabilities as of March 1 are composed of accounts payable of $121,500($102,000 for materials purchases and $19,500 for operating expenses). Management desires to maintain a minimum cash balance of $20,000. Q. Prepare a monthly cash budget for March and April.
Transcribed Image Text:The treasurer of Company has accumulated the following budget information for the first two months of the coming year: March $450,000 April $520,000 Sales. Manufacturing costs Selling and administrative expenses Capital additions 290,000 350,000 41,400 46,400 250,000 The company expects to sell about 35% of its merchandise for cash. Of sales on و ه و و ی م ه م ی ه م ش گو ن کی وو می ش م account, 80% are expected to be collected in full in the month of the sale and the remainder in the month following the sale. One-fourth of the manufacturing costs are expected to be paid in the month in which they are incurred and the other وی شو و ی و ی ه و ه و ی و م م م م مو م م م م مه مه م م three-fourths in the following month. Depreciation, insurance, and property taxes represent $6.400 of the probable monthly selling and administrative expenses. Insurance is paid in February and a $40,000 installment on income taxes is expected to be paid in April. Of the remainder of the selling and administrative expenses, one-half are expected to be paid in the month in which they are incurred and the balance in the following month. Capital additions of $250,000 are expected to be paid in March. Current assets as of March 1 are composed of cash of $45,000 and accounts receivable of $51,000. Current liabilities as of March 1 are composed of accounts payable of $121,500($102,000 for materials purchases and $19,500 for operating expenses). Management desires to maintain a minimum cash balance of $20,000. Q. Prepare a monthly cash budget for March and April.
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