Aaron Corporation is projecting a cash balance of $30,859 in its December 31, 20

Question

Aaron Corporation is projecting a cash balance of $30,859 in its December 31, 2013, balance sheet. Aaron’s schedule of expected collections from customers for the first quarter of 2014 shows total collections of $179,524. The schedule of expected payments for direct materials for the first quarter of 2014 shows total payments of $41,425. Other information gathered for the first quarter of 2014 is sale of equipment $3,997, direct labor $70,494, manufacturing overhead $34,845, selling and administrative expenses $44,977 and purchase of securities $12,060. Aaron wants to maintain a balance of at least $25,142 cash at the end of each quarter

Explanation / Answer

Cash budget for first Quarter 2014 Particulars Amount in $ Opening Balance              30,859 Add: expected collections from customers           179,524 Less: total payments towards material              41,425 sale of equipment                 3,997 direct labor              70,494 manufacturing overhead              34,845 selling and administrative expenses              44,977 purchase of securities              12,060                 2,585 maintain a balance              25,142 Cash to be borrowed              22,557

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