Consider the following information about Elmwood Manufacturing Company: Estimated Estimated Factory Estimated Selling and Month Sales Overhead Administrative Expenses December Year 1 $4,000,000 $650,000 $1,230,000 January Year 2 3,500,000 700,000 1,270,000 February Year 2 10,600,000 650,000 1,330,000 March Year 2 4,000,000 680,000 1,220,000 April Year 2 1,550,000 610,000 1,255,000 The company has found that approximately 30 percent of sales are collected during the month the sale is made and the remaining 70 percent are collected during the month following the sale. Material purchases are 30 percent of next month's estimated sales, and payments lag these purchases by one month. Labor costs are 35 percent of next month's sales and are paid during the month incurred. Factory overhead and selling and administrative expenses are paid during the month incurred. In addition, a payment for new equipment of $1.2 million is due in February. Also, a tax payment of $1.9 million and a dividend payment of $660,000 are due in March. The company's projected cash balance at the beginning of January is $1.5 million. Furthermore, Elmwood desires to maintain a $750,000 cash balance at the end of each month. Prepare a cash budget for Elmwood Manufacturing Company for the first three months of Year 2. Enter your answers as positive values, but use minus sign to indicate the lack of available cash. Enter zero if necessary. Do not leave any cells blank. Round your answers to the nearest dollar. Cash Budget First Quarter, Year 2 December January February March April Sales 24 24 Projected cash balance, $ $ beginning of month
Consider the following information about Elmwood Manufacturing Company: Estimated Estimated Factory Estimated Selling and Month Sales Overhead Administrative Expenses December Year 1 $4,000,000 $650,000 $1,230,000 January Year 2 3,500,000 700,000 1,270,000 February Year 2 10,600,000 650,000 1,330,000 March Year 2 4,000,000 680,000 1,220,000 April Year 2 1,550,000 610,000 1,255,000 The company has found that approximately 30 percent of sales are collected during the month the sale is made and the remaining 70 percent are collected during the month following the sale. Material purchases are 30 percent of next month's estimated sales, and payments lag these purchases by one month. Labor costs are 35 percent of next month's sales and are paid during the month incurred. Factory overhead and selling and administrative expenses are paid during the month incurred. In addition, a payment for new equipment of $1.2 million is due in February. Also, a tax payment of $1.9 million and a dividend payment of $660,000 are due in March. The company's projected cash balance at the beginning of January is $1.5 million. Furthermore, Elmwood desires to maintain a $750,000 cash balance at the end of each month. Prepare a cash budget for Elmwood Manufacturing Company for the first three months of Year 2. Enter your answers as positive values, but use minus sign to indicate the lack of available cash. Enter zero if necessary. Do not leave any cells blank. Round your answers to the nearest dollar. Cash Budget First Quarter, Year 2 December January February March April Sales 24 24 Projected cash balance, $ $ beginning of month
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...
Related questions
Question
(This is AFTER the screenshots)
Loan repayment | $ | $ | $ | ||||
Projected cash balance, | |||||||
end of month | $ | $ | $ |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College