Problem 21-4A (Part Level Submission) Colter Company prepares monthly cash budge

Question

Problem 21-4A (Part Level Submission) Colter Company prepares monthly cash budgets. Relet data from operating budgets for 2014 are: Januar Februar Sales Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses $387,100 121,660 99,540 77,420 87,374 $442,400 143,780 110,600 82,950 95,116 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 the second month following the sale. Sixty percent (60%) of direct materials 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 expenses that include $1,106 of depreciation per month Other data: 1. 2. 3. Credit sales: November 2013, $287,560; December 2013, $353,920 Purchases of direct materials: December 2013, 110,600 Other receipts: January-Collection of December 31, 2013, notes receivable $16,590; February-Proceeds from sale of securities $6,636 Other disbursements: February-Payment of $5,530 cash dividend The company's cash balance on January 1, 2014, is expected to be $66,360. The company wants to maintain a minimum cash balance of $55,300 (a) Your answer is correct.

Explanation / Answer

Particulars Jan Feb Beg cash balance 66360 59814 Add: Collection 357328 408114 Receivable 16590 0 sale of securiteis 0 6636 Total 373918 414750 Total available cash 440278 474564 Less: Direct material 117236 134932 Direct labour 99540 110600 Manufac 77420 82950 Selling 86268 94010 Cash dividend 0 5530 Total Disbursement 380464 428022 Net available cash 59814 46542 Financing Add: Borrowings 0 8758 Less Repayment 0 0 Ending cash balance 59814 55300

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.