use the following August cash budget information for Q and A company to answer t

Question

use the following August cash budget information for Q and A company to answer the questions below.

Exam 3-Principles of Accounting 2110 Managerial Fall 2015 Version B Uuse the olowing August cash B Use the following August Cash Budget information for Q & A Company to answer the questions below $26,000 55,000 31,000 9,000 11,000 5,000 Cash balance, August 1 Collections from customers Paid to suppliers Manufacturing overhead Direct labor Selling & administrative expenses Q & A pays wages in the month incurred. Manufacturing overhead includes $1,800 for machinery depreciation, but the amount for selling and administrative expenses is exclusive of depreciation. Additionally, Q & A also expects to buy a piece of property for $25,000 during August. Q & A can borrow in increments of $5,000 and would like to maintain a minimum cash balance of $10,000 for the month of August. SH What is Q & A's cash balance prior to any needed borrowing? How much, if anything, does Q & A need to borrow? What is the company's final budgeted cash balance for August? What is the company's beginning cash balance for September? 28. 29. 30. 31.

Explanation / Answer

28.

29. Minimum cash balnce to be maintained= $10000

Therefor cash available for Investment= $26800-$10000

= $16800

Cost of property= $25000

Amount to be borrowed= 25000-16800

= $8200

Since company can borrow in increments of $5000 therefore Amount that will be borrowed is $10000

30. Final budgeted cash balance = 26800+10000-25000

=$11800

31. Opening Cash Balanc of September= $11800

Particulars Amt. Opening cash balance $26000 Add: Collecion from debtors $55000 Less: Paid to suppliers $31000 Less: Manufaturing OH($9000-$1800) $7200 Less: Wages $11000 Less: selling & admin OH $5000 Closing Cash $26800

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