·0000 T-Mobile Wi-Fi 6:20 PM 80%. a edugen.wileyplus.com Exercise 7-14 Rigley Co

Question

·0000 T-Mobile Wi-Fi 6:20 PM 80%. a edugen.wileyplus.com Exercise 7-14 Rigley Company expects to have a cash balance of $46,000 on January 1, 2017. These are the relevant monthly budget data for the first two months of 2017 Chapter 1 Collections from customers: January $71,000, February $146,000. Payments to suppliers: January $40,000, February $75,000. Wages: January $30,000, February $40,000. Wages are paid in the month they are incurred. Administrative expenses: January $21,000, February $24,000. These costs include depreciation of $1,000 per month. All other costs are paid as incurred. SteA s Selling expenses: January $15,000, February $20,000. These costs are exclusive of depreciation. They are paid as incurred. Sales of short-term investments in January are expected to realize $12,000 in cash. Rigley Company has a line of credit at a local bank that enables it to borrow up to $25,000. The company wants to maintain a minimum monthly cash balance of $20,000. Prepare a cash budget for January and February. RIGLEY COMPANY Cash Budget Click if you would like to Sho Work for this questionc h Wk

Explanation / Answer

The Rigley Company Cash Budget For first two months of 2017 January February Beginning Balance 46000 70000 Add : Cash Receipts Collection from customers 71000 146000 Sale of short term investments 12000 Total Receipts 83000 146000 Total Cash available 129000 216000 Less : Cash payments Payments to suppliers 40000 75000 Wages 30000 40000 Administrative expenses 20000 23000 Selling expenses 15000 20000 Total Cash payments 105000 158000 Ending Balance 70000 58000

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