During December 2021, Hybrid has the following information to prepare its cash budget for January (4 weeks) 2022: Bank balance at 1 January 2022 is $ 6,000 bank overdraft. December sales were $90,000 (50% were on credit/account, 50% were cash). The December and January credit sales customers are expected to pay in the month following and be given a 3% discount for prompt payment. January sales - estimated to be $80,000 (40% on credit/account, 60% cash). Creditors are paid in the month after purchase. The balance of creditors at 31 December 2021 was $10,000. Computers will be purchased on 29 January for $30,000 cash and $20,000 on account. Other cash expenses are expected to be $5,000 each week. Owner takes $900 cash and $100 stock each fortnight for personal use. $500 interest on loan will be repaid to RIP on 31 January. Sale of machinery for cash in January is estimated to be $9,350. Gain on sale is estimated to be $2,350. Depreciation is $500 each month. Wages payments will be $20,900 each month. Required a) Prepare a Cash Budget for Hybrid for the month ending 31 January 2022. $ $ Cash receipts: Less cash payments: Increase (Decrease) in Cash Cash (Overdraft) at 1 January 2022 Cash (Overdraft) at 31 January 2022

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 1E: At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of...

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During December 2021, Hybrid has the following information to prepare its cash budget for January (4 weeks) 2022:

Bank balance at 1 January 2022 is $ 6,000 bank overdraft.
December sales were $90,000 (50% were on credit/account, 50% were cash). The December and January credit sales customers are expected to pay in the month following and be given a 3% discount for prompt payment. January sales - estimated to be $80,000 (40% on credit/account, 60% cash).
Creditors are paid in the month after purchase. The balance of creditors at 31 December 2021 was $10,000.
Computers will be purchased on 29 January for $30,000 cash and $20,000 on account.
Other cash expenses are expected to be $5,000 each week.
Owner takes $900 cash and $100 stock each fortnight for personal use.
$500 interest on loan will be repaid to RIP on 31 January.
Sale of machinery for cash in January is estimated to be $9,350. Gain on sale is estimated to be $2,350.
Depreciation is $500 each month.
Wages payments will be $20,900 each month.

Required

a) Prepare a Cash Budget for Hybrid for the month ending 31 January 2022.

	$	$
Cash receipts:






Less cash payments:








Increase (Decrease) in Cash
Cash (Overdraft) at 1 January 2022
Cash (Overdraft) at 31 January 2022

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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