Walter Company has the following informaion for the month of March: Cash balance

Question

Walter Company has the following informaion for the month of March: Cash balance, March 1 Collections from customers Paid to suppliers 17,070 38.950 22 800 6,800 8,500 4.700 Diruct labor Sclling and administrativc cxpenscs Walter pays all expenses in the month incured. Manufacturing overhead includes $1,450 for machinery depreciation, but the amount for selling and administrative expenses is exclusive of depreciation. Additionally, Walter also expects to buy a piece of property for $7.500 during March. Walter can borrow in increments of S1,000 and would like to maintain a minimum cash balance of $10,000. Required Prepare Walter's cash budget for the month of March. Bcginning Cash Balancc Budgoted Cash Recoipts Budgeted Cash Payments Proliminary Cash Belance Ending cash balance

Explanation / Answer

Note : since ending balance to be maintained at 10000 and cash balance available is 7370, hence there is need for borrowing 3000 ( which is in multiples of 1000)

Company W Cash Budget For the month ended march 31 Beginning cash balance 17070 Budgeted cash receipts 38950 Budgeted cash payments: paid to suppliers 22800 Manufacturing overhead(6600-1450) 5150 Direct labor 8500 Selling and administrative 4700 property purchased 7500 48650 Preliminary cash balance 7370 Cash borrowed 3000 Ending cash balance 10370

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