Aaron Corporation is projecting a cash balance of $30,681 in its December 31, 20

Question

Aaron Corporation is projecting a cash balance of $30,681 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 $180,130. The schedule of expected payments for direct materials for the first quarter of 2014 shows total payments of $41,061. Other information gathered for the first quarter of 2014 is sale of equipment $3,824, direct labor $69,510, manufacturing overhead $35,449, selling and administrative expenses $44,817 and purchase of securities $12,416. Aaron wants to maintain a balance of at least $25,402 cash at the end of each quarter. Prepare a cash budget for the first quarter.

Explanation / Answer

cash budget cash collection 180130 sale of equipment 3824 total cash collection 183954 payments 203253 direct material 41061 direct labor 69510 manufacturing overhead 35449 selling and administrative expenses 44817 purchase of securities 12416 deficiency of cash -19299 opening cash balance 30681 available cash 11382 cash balance to be maintained 25402 amount to be borrowed 14020

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