Cash budget
(Not rated)
(Not rated)
| This is a comprehensive problem all contained on this spreadsheet tab. | ||||||
| Cash Budget | ||||||
| Below is summary monthly income statement data for Ace Manufacturing Company. | ||||||
| January | February | |||||
| Sales revenue | 275,000 | 250,000 | ||||
| Direct materials purchases | 60,000 | 70,000 | ||||
| Direct labor | 88,000 | 95,000 | ||||
| Manufacturing overhead | 60,000 | 62,000 | ||||
| Selling and administrative expenses | 45,000 | 46,000 | ||||
| All sales are on account, and history has shown that 40% of sales is expected to be collected in the month of the sale, with 60% collected the following month. | ||||||
| Direct materials are paid 50% in the month of purchase and 50% the following month. All other expenses are paid as incurred. All costs shown are cash-based costs (depreciation has already been eliminated). | ||||||
| Other data: | ||||||
| 1. December sales were $240,000. | ||||||
| 2. Purchases of direct materials purchased in December were $50,000. | ||||||
| 3. The company has interest payments due of $5,000 per month. | ||||||
| 4. The cash balance on January 1 was $15,000. | ||||||
| Instructions | ||||||
| A. Prepare schedules for expected collections from customers and expected payments for direct materials purchases. | ||||||
| B. Prepare a cash budget for January and February. | ||||||
9 years ago
Cash budget
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cash_budget_cal-_acc.xlsx
