Use this information to prepare a cash budget for the first two quarters of the yea

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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required: Use this information to prepare a cash budget for the first two quarters of the year

Relevant data from Picta Company's operating budgets are presented below. The company's
financial year ends on 30 June.
Quarter 1
Quarter 2
Sales
$248,470
$251,539
Direct material purchases
120,295
128,832
Direct labor
76,553
74,289
Manufacturing overhead
26,000
24,400
Selling and administration expenses
33,500
33,500
Depreciation included in selling and
administration expenses
2,000
2,500
Collection from customers
230,524
220,116
Cash payments for purchases
114,345
118,346
Additional data:
Equipment was sold in July for $8,000 and $4,500 in November. Dividends of $5,500 were paid in
August. The beginning cash balance was $80,395 and a required minimum cash balance per
quarter is $60,000.
The company has a 15% open line of credit for $70 000 with their bank.
Transcribed Image Text:Relevant data from Picta Company's operating budgets are presented below. The company's financial year ends on 30 June. Quarter 1 Quarter 2 Sales $248,470 $251,539 Direct material purchases 120,295 128,832 Direct labor 76,553 74,289 Manufacturing overhead 26,000 24,400 Selling and administration expenses 33,500 33,500 Depreciation included in selling and administration expenses 2,000 2,500 Collection from customers 230,524 220,116 Cash payments for purchases 114,345 118,346 Additional data: Equipment was sold in July for $8,000 and $4,500 in November. Dividends of $5,500 were paid in August. The beginning cash balance was $80,395 and a required minimum cash balance per quarter is $60,000. The company has a 15% open line of credit for $70 000 with their bank.
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