Calculate the cash receipts $ for the month of September.Calculate the material purchase $ for the appropriate months.Calculate the accounts payable payments for the month September.Calculate the accounts payable balance on the Balance Sheet for the month September.Prepare a cash budget for the month of September. Problem 1As treasurer of a manufacturing company, you are preparing a cash budget for September of thenext fiscal year. The information for September you have, at your disposal to complete this task isas follows:(а)Next year's sales forecast follows:JulyAugustSeptemberOctober$350,000$240,000$300,000$360,000(b)The sales price is $60.(c)Each month, 20% of the sales are for cash and 80% are on credit.(d)The AR collection pattern for credit sales is:20% is received in 0-30 days50% is received in 31-60 days30% is received in 60-90 days(e)The cash in bank at the beginning of September is $15,400(f)The per unit production cost data is:Direct material$20Direct labor1 direct labor hour per unit; $15 direct labor rateThe company monthly beginning FG inventory policy is to maintain a minimum of 25%of the current month's sales.(g)(h)The AP pattern for credit purchases is:30% is paid in 0-30 days70% is paid in 31-60 days(i)There is a income tax payment of $35,000 at the end of each quarterThe company accrues $30,000 for dividend payment made on the month following theend of each quarter.()(k)Recurring monthly overhead expenses are $35,000 is composed of the following:Cost Behavior:Fixed cost: $20,000Variable cost: $15,000Depreciation expense included in overhead: $5,000(1)Recurring monthly SG&A is $44,000 including $4,000 depreciation.The company has a policy of maintaining a minimum cash balance of $15,000. Ifnecessary, the company can borrow in multiples of $1,000 at a simple interest rate of10% per year. All borrowings occur at the beginning of the month in which the amount isborrowed while all repayments occur at the end of a month in which there is an excess ofcash above the minimum balance. Interest is paid on the amount repaid at the time ofrepayment.(m)2The company borrowed $20,000 on July 1 of following fiscal year to meet theirminimum cash requirements.(n)

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 5PA: Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash...

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Calculate the cash receipts $ for the month of September.
Calculate the material purchase $ for the appropriate months.
Calculate the accounts payable payments for the month September.
Calculate the accounts payable balance on the Balance Sheet for the month September.
Prepare a cash budget for the month of September.

Problem 1
As treasurer of a manufacturing company, you are preparing a cash budget for September of the
next fiscal year. The information for September you have, at your disposal to complete this task is
as follows:
(а)
Next year's sales forecast follows:
July
August
September
October
$350,000
$240,000
$300,000
$360,000
(b)
The sales price is $60.
(c)
Each month, 20% of the sales are for cash and 80% are on credit.
(d)
The AR collection pattern for credit sales is:
20% is received in 0-30 days
50% is received in 31-60 days
30% is received in 60-90 days
(e)
The cash in bank at the beginning of September is $15,400
(f)
The per unit production cost data is:
Direct material
$20
Direct labor
1 direct labor hour per unit; $15 direct labor rate
The company monthly beginning FG inventory policy is to maintain a minimum of 25%
of the current month's sales.
(g)
(h)
The AP pattern for credit purchases is:
30% is paid in 0-30 days
70% is paid in 31-60 days
(i)
There is a income tax payment of $35,000 at the end of each quarter
The company accrues $30,000 for dividend payment made on the month following the
end of each quarter.
()
(k)
Recurring monthly overhead expenses are $35,000 is composed of the following:
Cost Behavior:
Fixed cost: $20,000
Variable cost: $15,000
Depreciation expense included in overhead: $5,000
(1)
Recurring monthly SG&A is $44,000 including $4,000 depreciation.
The company has a policy of maintaining a minimum cash balance of $15,000. If
necessary, the company can borrow in multiples of $1,000 at a simple interest rate of
10% per year. All borrowings occur at the beginning of the month in which the amount is
borrowed while all repayments occur at the end of a month in which there is an excess of
cash above the minimum balance. Interest is paid on the amount repaid at the time of
repayment.
(m)
2
The company borrowed $20,000 on July 1 of following fiscal year to meet their
minimum cash requirements.
(n)

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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