Cash receipts budget for the month of July, August and September.

Question

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Answer 1

Question

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

Chapter 20, Problem 2PSA

(1)

To determine

To prepare: Cash receipts budget for the month of July, August and September.

(1)

Expert Solution

Explanation of Solution

Cash receipts
Particulars	July Amount ($)	August Amount ($)	September Amount ($)
Budgeted sales	64,000	80,000	48,000
Cash collection of sales:
Current month (20%)	12,800	16,000	9,600
Previous month (80%)	45,000	51,200	64,000
Total	57,800	67,200	73,600
Table (1)

(2)

To determine

To prepare: Monthly cash budget for the month of July, August, September.

(2)

Expert Solution

Explanation of Solution

Company B
Cash Budget
Particulars	July Amount($)	August Amount($)	September Amount($)
Beginning cash balance	15,000	15,000	25,504
Add: Cash receipts	57,800	67,200	73,600
Total cash available	72,800	82,200	99,104
Less: Cash disbursement (working note 1)	57,350	52,146	49,700
Preliminary cash balance	15,450	30,054	49,404
Less: Required ending balance	15,000	15,000	15,000
Surplus	450	15,054	34,404
Beginning balance of loan	5,000	4,550	0
Add: Additional loan from bank	0	0	0
Less: Repayment of loan	450	4,550	0
Ending balance of loan	4,550	0	0
Cash balance to be carried forward after payment of loan.	15,000	25,504	49,404
Table (2)

Working Note 1:

Cash Disbursements
Particulars	July Amount($)	August Amount($)	September Amount($)
Interest (working note 2)	50	46	0
Direct material	16,160	13,440	13,760
Direct labor	4,040	3,360	3,440
Factory overhead	20,200	16,800	17,200
Sales commission	6,400	8,000	4,800
Office salaries	4,000	4,000	4,000
Rent	6,500	6,500	6,500
Total	57,350	52,146	49,700
Table (3)

Working note 2:

Formula to calculate interest expense for the month,

Interest expense=Beginning balance of loan×1%

For July,
Beginning balance of loan is $5,000.

Substitute $5,000 for beginning balance.

Interest expense=$5,000×1% =$50

For August,
Beginning balance of loan $4,550 (calculated).

Substitute $4,550 for beginning balance.

Interest expense=$4,550×1% =$46

For September,
Beginning balance of loan $0 (calculated).

Substitute $0 for beginning balance.

Interest expense=$0×1% =$0

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Answer 2

Question

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

Chapter 20, Problem 2PSA

(1)

To determine

To prepare: Cash receipts budget for the month of July, August and September.

(1)

Expert Solution

Explanation of Solution

Cash receipts
Particulars	July Amount ($)	August Amount ($)	September Amount ($)
Budgeted sales	64,000	80,000	48,000
Cash collection of sales:
Current month (20%)	12,800	16,000	9,600
Previous month (80%)	45,000	51,200	64,000
Total	57,800	67,200	73,600
Table (1)

(2)

To determine

To prepare: Monthly cash budget for the month of July, August, September.

(2)

Expert Solution

Explanation of Solution

Company B
Cash Budget
Particulars	July Amount($)	August Amount($)	September Amount($)
Beginning cash balance	15,000	15,000	25,504
Add: Cash receipts	57,800	67,200	73,600
Total cash available	72,800	82,200	99,104
Less: Cash disbursement (working note 1)	57,350	52,146	49,700
Preliminary cash balance	15,450	30,054	49,404
Less: Required ending balance	15,000	15,000	15,000
Surplus	450	15,054	34,404
Beginning balance of loan	5,000	4,550	0
Add: Additional loan from bank	0	0	0
Less: Repayment of loan	450	4,550	0
Ending balance of loan	4,550	0	0
Cash balance to be carried forward after payment of loan.	15,000	25,504	49,404
Table (2)

Working Note 1:

Cash Disbursements
Particulars	July Amount($)	August Amount($)	September Amount($)
Interest (working note 2)	50	46	0
Direct material	16,160	13,440	13,760
Direct labor	4,040	3,360	3,440
Factory overhead	20,200	16,800	17,200
Sales commission	6,400	8,000	4,800
Office salaries	4,000	4,000	4,000
Rent	6,500	6,500	6,500
Total	57,350	52,146	49,700
Table (3)

Working note 2:

Formula to calculate interest expense for the month,

Interest expense=Beginning balance of loan×1%

For July,
Beginning balance of loan is $5,000.

Substitute $5,000 for beginning balance.

Interest expense=$5,000×1% =$50

For August,
Beginning balance of loan $4,550 (calculated).

Substitute $4,550 for beginning balance.

Interest expense=$4,550×1% =$46

For September,
Beginning balance of loan $0 (calculated).

Substitute $0 for beginning balance.

Interest expense=$0×1% =$0

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Answer 3

Question

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

Chapter 20, Problem 2PSA

(1)

To determine

To prepare: Cash receipts budget for the month of July, August and September.

(1)

Expert Solution

Explanation of Solution

Cash receipts
Particulars	July Amount ($)	August Amount ($)	September Amount ($)
Budgeted sales	64,000	80,000	48,000
Cash collection of sales:
Current month (20%)	12,800	16,000	9,600
Previous month (80%)	45,000	51,200	64,000
Total	57,800	67,200	73,600
Table (1)

(2)

To determine

To prepare: Monthly cash budget for the month of July, August, September.

(2)

Expert Solution

Explanation of Solution

Company B
Cash Budget
Particulars	July Amount($)	August Amount($)	September Amount($)
Beginning cash balance	15,000	15,000	25,504
Add: Cash receipts	57,800	67,200	73,600
Total cash available	72,800	82,200	99,104
Less: Cash disbursement (working note 1)	57,350	52,146	49,700
Preliminary cash balance	15,450	30,054	49,404
Less: Required ending balance	15,000	15,000	15,000
Surplus	450	15,054	34,404
Beginning balance of loan	5,000	4,550	0
Add: Additional loan from bank	0	0	0
Less: Repayment of loan	450	4,550	0
Ending balance of loan	4,550	0	0
Cash balance to be carried forward after payment of loan.	15,000	25,504	49,404
Table (2)

Working Note 1:

Cash Disbursements
Particulars	July Amount($)	August Amount($)	September Amount($)
Interest (working note 2)	50	46	0
Direct material	16,160	13,440	13,760
Direct labor	4,040	3,360	3,440
Factory overhead	20,200	16,800	17,200
Sales commission	6,400	8,000	4,800
Office salaries	4,000	4,000	4,000
Rent	6,500	6,500	6,500
Total	57,350	52,146	49,700
Table (3)

Working note 2:

Formula to calculate interest expense for the month,

Interest expense=Beginning balance of loan×1%

For July,
Beginning balance of loan is $5,000.

Substitute $5,000 for beginning balance.

Interest expense=$5,000×1% =$50

For August,
Beginning balance of loan $4,550 (calculated).

Substitute $4,550 for beginning balance.

Interest expense=$4,550×1% =$46

For September,
Beginning balance of loan $0 (calculated).

Substitute $0 for beginning balance.

Interest expense=$0×1% =$0

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Answer 4

Question

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

Chapter 20, Problem 2PSA

(1)

To determine

To prepare: Cash receipts budget for the month of July, August and September.

(1)

Expert Solution

Explanation of Solution

Cash receipts
Particulars	July Amount ($)	August Amount ($)	September Amount ($)
Budgeted sales	64,000	80,000	48,000
Cash collection of sales:
Current month (20%)	12,800	16,000	9,600
Previous month (80%)	45,000	51,200	64,000
Total	57,800	67,200	73,600
Table (1)

(2)

To determine

To prepare: Monthly cash budget for the month of July, August, September.

(2)

Expert Solution

Explanation of Solution

Company B
Cash Budget
Particulars	July Amount($)	August Amount($)	September Amount($)
Beginning cash balance	15,000	15,000	25,504
Add: Cash receipts	57,800	67,200	73,600
Total cash available	72,800	82,200	99,104
Less: Cash disbursement (working note 1)	57,350	52,146	49,700
Preliminary cash balance	15,450	30,054	49,404
Less: Required ending balance	15,000	15,000	15,000
Surplus	450	15,054	34,404
Beginning balance of loan	5,000	4,550	0
Add: Additional loan from bank	0	0	0
Less: Repayment of loan	450	4,550	0
Ending balance of loan	4,550	0	0
Cash balance to be carried forward after payment of loan.	15,000	25,504	49,404
Table (2)

Working Note 1:

Cash Disbursements
Particulars	July Amount($)	August Amount($)	September Amount($)
Interest (working note 2)	50	46	0
Direct material	16,160	13,440	13,760
Direct labor	4,040	3,360	3,440
Factory overhead	20,200	16,800	17,200
Sales commission	6,400	8,000	4,800
Office salaries	4,000	4,000	4,000
Rent	6,500	6,500	6,500
Total	57,350	52,146	49,700
Table (3)

Working note 2:

Formula to calculate interest expense for the month,

Interest expense=Beginning balance of loan×1%

For July,
Beginning balance of loan is $5,000.

Substitute $5,000 for beginning balance.

Interest expense=$5,000×1% =$50

For August,
Beginning balance of loan $4,550 (calculated).

Substitute $4,550 for beginning balance.

Interest expense=$4,550×1% =$46

For September,
Beginning balance of loan $0 (calculated).

Substitute $0 for beginning balance.

Interest expense=$0×1% =$0

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Answer 5

Chapter 20, Problem 2PSA

(1)

To determine

To prepare: Cash receipts budget for the month of July, August and September.

(1)

Expert Solution

Explanation of Solution

Cash receipts
Particulars	July Amount ($)	August Amount ($)	September Amount ($)
Budgeted sales	64,000	80,000	48,000
Cash collection of sales:
Current month (20%)	12,800	16,000	9,600
Previous month (80%)	45,000	51,200	64,000
Total	57,800	67,200	73,600
Table (1)

(2)

To determine

To prepare: Monthly cash budget for the month of July, August, September.

(2)

Expert Solution

Explanation of Solution

Company B
Cash Budget
Particulars	July Amount($)	August Amount($)	September Amount($)
Beginning cash balance	15,000	15,000	25,504
Add: Cash receipts	57,800	67,200	73,600
Total cash available	72,800	82,200	99,104
Less: Cash disbursement (working note 1)	57,350	52,146	49,700
Preliminary cash balance	15,450	30,054	49,404
Less: Required ending balance	15,000	15,000	15,000
Surplus	450	15,054	34,404
Beginning balance of loan	5,000	4,550	0
Add: Additional loan from bank	0	0	0
Less: Repayment of loan	450	4,550	0
Ending balance of loan	4,550	0	0
Cash balance to be carried forward after payment of loan.	15,000	25,504	49,404
Table (2)

Working Note 1:

Cash Disbursements
Particulars	July Amount($)	August Amount($)	September Amount($)
Interest (working note 2)	50	46	0
Direct material	16,160	13,440	13,760
Direct labor	4,040	3,360	3,440
Factory overhead	20,200	16,800	17,200
Sales commission	6,400	8,000	4,800
Office salaries	4,000	4,000	4,000
Rent	6,500	6,500	6,500
Total	57,350	52,146	49,700
Table (3)

Working note 2:

Formula to calculate interest expense for the month,

Interest expense=Beginning balance of loan×1%

For July,
Beginning balance of loan is $5,000.

Substitute $5,000 for beginning balance.

Interest expense=$5,000×1% =$50

For August,
Beginning balance of loan $4,550 (calculated).

Substitute $4,550 for beginning balance.

Interest expense=$4,550×1% =$46

For September,
Beginning balance of loan $0 (calculated).

Substitute $0 for beginning balance.

Interest expense=$0×1% =$0

Answer 6

Chapter 20, Problem 2PSA

(1)

To determine

To prepare: Cash receipts budget for the month of July, August and September.

(1)

Expert Solution

Explanation of Solution

Cash receipts
Particulars	July Amount ($)	August Amount ($)	September Amount ($)
Budgeted sales	64,000	80,000	48,000
Cash collection of sales:
Current month (20%)	12,800	16,000	9,600
Previous month (80%)	45,000	51,200	64,000
Total	57,800	67,200	73,600
Table (1)

Answer 7

Chapter 20, Problem 2PSA

(1)

To determine

To prepare: Cash receipts budget for the month of July, August and September.

Answer 8

(1)

Expert Solution

Explanation of Solution

Cash receipts
Particulars	July Amount ($)	August Amount ($)	September Amount ($)
Budgeted sales	64,000	80,000	48,000
Cash collection of sales:
Current month (20%)	12,800	16,000	9,600
Previous month (80%)	45,000	51,200	64,000
Total	57,800	67,200	73,600
Table (1)

Answer 9

(1)

Expert Solution

Answer 10

(1)

Expert Solution

Answer 11

Expert Solution

Answer 12

(2)

To determine

To prepare: Monthly cash budget for the month of July, August, September.

(2)

Expert Solution

Explanation of Solution

Company B
Cash Budget
Particulars	July Amount($)	August Amount($)	September Amount($)
Beginning cash balance	15,000	15,000	25,504
Add: Cash receipts	57,800	67,200	73,600
Total cash available	72,800	82,200	99,104
Less: Cash disbursement (working note 1)	57,350	52,146	49,700
Preliminary cash balance	15,450	30,054	49,404
Less: Required ending balance	15,000	15,000	15,000
Surplus	450	15,054	34,404
Beginning balance of loan	5,000	4,550	0
Add: Additional loan from bank	0	0	0
Less: Repayment of loan	450	4,550	0
Ending balance of loan	4,550	0	0
Cash balance to be carried forward after payment of loan.	15,000	25,504	49,404
Table (2)

Working Note 1:

Cash Disbursements
Particulars	July Amount($)	August Amount($)	September Amount($)
Interest (working note 2)	50	46	0
Direct material	16,160	13,440	13,760
Direct labor	4,040	3,360	3,440
Factory overhead	20,200	16,800	17,200
Sales commission	6,400	8,000	4,800
Office salaries	4,000	4,000	4,000
Rent	6,500	6,500	6,500
Total	57,350	52,146	49,700
Table (3)

Working note 2:

Formula to calculate interest expense for the month,

Interest expense=Beginning balance of loan×1%

For July,
Beginning balance of loan is $5,000.

Substitute $5,000 for beginning balance.

Interest expense=$5,000×1% =$50

For August,
Beginning balance of loan $4,550 (calculated).

Substitute $4,550 for beginning balance.

Interest expense=$4,550×1% =$46

For September,
Beginning balance of loan $0 (calculated).

Substitute $0 for beginning balance.

Interest expense=$0×1% =$0

Answer 13

(2)

To determine

To prepare: Monthly cash budget for the month of July, August, September.

Answer 14

(2)

Expert Solution

Explanation of Solution

Company B
Cash Budget
Particulars	July Amount($)	August Amount($)	September Amount($)
Beginning cash balance	15,000	15,000	25,504
Add: Cash receipts	57,800	67,200	73,600
Total cash available	72,800	82,200	99,104
Less: Cash disbursement (working note 1)	57,350	52,146	49,700
Preliminary cash balance	15,450	30,054	49,404
Less: Required ending balance	15,000	15,000	15,000
Surplus	450	15,054	34,404
Beginning balance of loan	5,000	4,550	0
Add: Additional loan from bank	0	0	0
Less: Repayment of loan	450	4,550	0
Ending balance of loan	4,550	0	0
Cash balance to be carried forward after payment of loan.	15,000	25,504	49,404
Table (2)

Working Note 1:

Cash Disbursements
Particulars	July Amount($)	August Amount($)	September Amount($)
Interest (working note 2)	50	46	0
Direct material	16,160	13,440	13,760
Direct labor	4,040	3,360	3,440
Factory overhead	20,200	16,800	17,200
Sales commission	6,400	8,000	4,800
Office salaries	4,000	4,000	4,000
Rent	6,500	6,500	6,500
Total	57,350	52,146	49,700
Table (3)