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ilrn/takeAssignment/takeAssignmentMain.do?invoker-assignments&takeAssignmentSessionl; ocator-assignment-take&inprogress-false; Calculator The treasurer of Calico Dreams Compan y has accumulated the following budget information for the first two months of the coming fiscal year: March $450,000 290,000 41,400 250,000 April Sales Manufacturing costs Selling and administrative expenses Capital additions 350,000 46,400 The company expects to sell about 35% of its merchandise for cash, of sales on acc remainder in the month following the sale. One-fourth of the manufacturing costs are paid in the month in which they are incurred and the other fourth Insurance is paid in February, and property taxes are paid yearly in September. A $40,000 installment on income taxes is to be paid in April, of the remainder of the selling and administrative expenses, one-half is to be paid in the month in which they are incurred and the balance in the following month. Capital additions of $250,000 are paid in March. ount, 80% are collected n full in the month-of these and the s in the following month. Depreciation, insurance, and property taxes represent $6,400 of the monthly selling and administrative expenses. Current assets as of March 1 are composed of cash of $45,000 and accounts receivable of s51,000. Current liabilities as of March 1 are accounts payable of $121,500 ($102,000 for materials purchases and $19,500 for selling and administrative expenses). Management desires to maintain a minimum cash balance of $25,000. Prepare a monthly cash budget for March and April. If an amount box does not require an entry, leave it blank. Use the minus sign to indicate negative numbers or decrease in cash. Calico Dreams Company Cash Budget For the Two Months Ending April 30 March April ?Previous Next?

Explanation / Answer

Cash Budget March April Estimated cash receipts from cash sales 157500   [450000*.35] 182000   [520000*.35] collection from receivables 285000   [(450000*.65*.80)+51000 beginning] 328900   [(520000*.65*.80)+(450000*.65*.20)march credit sales] Total cash receipts 442500 510900 Estimated cash payment for Manufacturing cost (174500)   [(290000*1/4)+102000beginning] (305000)    [(350000*1//4)+(290000*3/4)] selling and administrative expense (37000)    [(41400-6400 depreciation)*1/2+19500] (37500)    [(41400-6400)*1/2+(46400-6400)*1/2] capital additions (250000) 0 Income taxes (40000) Total cash payment (461500) (382500) cash increase/(decrease) (19000) 128400 cash balance at beginning 45000 26000 cash balance at end of month 26000 154400 Minimum cash balance 25000 25000 Excess/(deficiency) 1000 129400

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