
Concept explainers
The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:
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).
Current assets as of September 1 include cash of $40,000, marketable securities of $75,000, and
Instructions
Prepare a monthly cash budget and supporting schedules for September, October, and November.
On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?

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Chapter 7 Solutions
Managerial Accounting, Loose-leaf Version
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