Walter Company has the following information for the month of March Cash balance

Question

Walter Company has the following information for the month of March Cash balance, March 1 Collections from customers Paid to suppliers Manufacturing overhead Direct labor Selling and administrative expenses $ 17,070 38,950 22,800 6,600 8,500 4,700 Walter pays all expenses in the month incurred. Manufacturing overhead includes $1,450 for machinery depreciation, but the amount for selling and administrative expenses is exclusive of depreciation. Additional y, Walter also expects to buy a piece o pro erty or $7 500 during March. Walter can borrow n increments of$1 0 and would ke maintain a minimum cash balance of ?000 Required: Prepare Walter's cash budget for the month of March. Beginning Cash Balance Budgeted Cash Recelpts Budgeted Cash Payments Preliminary Cash Balance Cash Borrowed Ending cash balance

Explanation / Answer

Workings

1. Beginning cash balance (given) = 17070

2. Budgeted cash receipts :

Collections from customers : 38950

3. Budgeted Cash payments

Total = 48650

4. Preliminary Cash Balance - NIL

5. Cash Borrowed = 17070+38950-48650=7370

Minimum Cash Balance = 10000

Amount to be borrowed in increments of 1000

So Amount borrowed will be 3000

Beginning cash balance 17070 Budgeted cash Reciepts 38950 Budgeted cash payments 48650 Preliminary cash Balance nil cash Borrowed 3000 Ending cash balance 10370

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