edugen.wileyplus.com SKimmel, Accounting: Tools for Business Decision Making, Se

Question

edugen.wileyplus.com SKimmel, Accounting: Tools for Business Decision Making, Se Prin. of Acct actice Gradebok ORION en Assignment Problem 21-4A Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2014 are Sales Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses $404,950 127,270 104,130 80,990 91,403 $462,800 150,410 115,700 86,775 99,502 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expense that include $1,157 of depreciation per month. the second month following the sale. Sixty percent (60%) of direct materials Other data 1. Credit sales: November 2013, $300,820; December 2013, $370,240 2. Purchases of direct materials: December 2013, $115,700 3. Other receipts: January-Collection of December 31, 2013, notes receivable $17,355; February-Proceeds from sale of securities $6,942 4 Other disbursements: February-Payment of $5,785 cash dividend The company's cash balance on January 1, 2014, is expected to be $69,420. The company wants to maintain a minimum cash balance of $57,850

Explanation / Answer

Solution.

Particulars January February Beginning cash balance              69,420              57,850 ADD Receipts Cpllection from Coustmeres            373,711           426,933 Notes receivable              17,355 Sale of Securities                6,942 Total Receipts            391,066           433,875 Total Available cash            460,486           491,725 Less Disbrushments Direct Materials            168,550           150,410 Direct labor            104,130           115,700 manufacturing overhead              80,990              86,775 Selling and Admin.Expenses              90,246              98,345 Depreciation                1,157                1,157 Total Disbrusement            445,073           452,387 Excess or Deficiency              15,413              39,338 Financinf: Borrowings              42,437              18,512 Repayments Ending cash balance              57,850              57,850

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