Aaron Corporation is projecting a cash balance of $30,697 in its December 31, 20

Question

Aaron Corporation is projecting a cash balance of $30,697 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 $180,147. The schedule of expected payments for direct materials for the first quarter of 2014 shows total payments of $40,705. Other information gathered for the first quarter of 2014 is sale of equipment $3,781, direct labor $70,436, manufacturing overhead $35,438, selling and administrative expenses $45,124 and purchase of securities $12,480. Aaron wants to maintain a balance of at least $24,688 cash at the end of each quarter.

Prepare a cash budget for the first quarter.

Explanation / Answer

DETAILS AMOUNT BEGINNING BALANCE 1 JAN 2014 $30697 ADD- BUDGETED CASH RECEIPT FROM CUSTOMERS $180147 FROM SALE OF EQIPEMENT $3781 LESS BUDGETED PAYMENTS DIRECT MATERIAL ($40705) DIRECT LABOUR ($70436) MANUFACTURING OVERHEAD ($35438) SELLING & ADMIN OVERHEAD ($45124) PURCHASE OF SECURITES ($12480) EXPECTED CASH BALANCE AT MARCH 31 2014 $10442 DESIRED CASH BALNCE AT MARCH 31 2014 $24688 BALANCE AMOUNT TO BE BORROWED $14246

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