eBook Cash Budget The controller of Shoe Mart Inc. asks you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: January February March Sales $148,000 $179,000 $238,000 Manufacturing costs 62,000 77,000 86,000 Selling and administrative expenses 43,000 48,000 52,000 Capital expenditures _ _ 57,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 65% are expected to be collected in full in the month following the sale and the remainder the following month. Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in June, and the annual property taxes are paid in October. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. All sales and administrative expenses are paid in the month incurred. Current assets as of January 1 include cash of $56,000, marketable securities of $80,000, and accounts receivable of $171,300 ($130,000 from December sales and $41,300 from November sales). Sales on account in November and December were $118,000 and $130,000, respectively. Current liabilities as of January 1 include a $74,000, 12%, 90-day note payable due March 20 and $7,000 of accounts payable incurred in December for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $4,400 in dividends will be received in January. An estimated income tax payment of $21,000 will be made in February. Shoe Mart's regular quarterly dividend of $7,000 is expected to be declared in February and paid in March. Management desires to maintain a minimum cash balance of $44,000. Required: 1. Prepare a monthly cash budget and supporting schedules for January, February, and March. Enter an increase in the month's cash balance or an excess cash amount as a positive number. Enter a decrease in the month's cash balance or a cash deficiency as a negative number. Assume 360 days per year for interest calculations. Shoe Mart Inc.Cash BudgetFor the Three Months Ending March 31 January February March Estimated cash receipts from: Cash sales $fill in the blank 49c2b306b017065_1 $fill in the blank 49c2b306b017065_2 $fill in the blank 49c2b306b017065_3 Collection of accounts receivable fill in the blank 49c2b306b017065_4 fill in the blank 49c2b306b017065_5 fill in the blank 49c2b306b017065_6 Dividends fill in the blank 49c2b306b017065_7 fill in the blank 49c2b306b017065_8 fill in the blank 49c2b306b017065_9 Total cash receipts $fill in the blank 49c2b306b017065_10 $fill in the blank 49c2b306b017065_11 $fill in the blank 49c2b306b017065_12 Estimated cash payments for: Manufacturing costs $fill in the blank 49c2b306b017065_13 $fill in the blank 49c2b306b017065_14 $fill in the blank 49c2b306b017065_15 Selling and administrative expenses fill in the blank 49c2b306b017065_16 fill in the blank 49c2b306b017065_17 fill in the blank 49c2b306b017065_18 Capital expenditures fill in the blank 49c2b306b017065_19 fill in the blank 49c2b306b017065_20 fill in the blank 49c2b306b017065_21 Other purposes: Note payable (including interest) fill in the blank 49c2b306b017065_22 fill in the blank 49c2b306b017065_23 fill in the blank 49c2b306b017065_24 Income tax fill in the blank 49c2b306b017065_25 fill in the blank 49c2b306b017065_26 fill in the blank 49c2b306b017065_27 Dividends fill in the blank 49c2b306b017065_28 fill in the blank 49c2b306b017065_29 fill in the blank 49c2b306b017065_30 Total cash payments $fill in the blank 49c2b306b017065_31 $fill in the blank 49c2b306b017065_32 $fill in the blank 49c2b306b017065_33 Cash increase (decrease) $fill in the blank 49c2b306b017065_34 $fill in the blank 49c2b306b017065_35 $fill in the blank 49c2b306b017065_36 Cash balance at beginning of month fill in the blank 49c2b306b017065_37 fill in the blank 49c2b306b017065_38 fill in the blank 49c2b306b017065_39 Cash balance at end of month $fill in the blank 49c2b306b017065_40 $fill in the blank 49c2b306b017065_41 $fill in the blank 49c2b306b017065_42 Minimum cash balance fill in the blank 49c2b306b017065_43 fill in the blank 49c2b306b017065_44 fill in the blank 49c2b306b017065_45 Excess (deficiency) $fill in the blank 49c2b306b017065_46 $fill in the blank 49c2b306b017065_47 fill in the blank 49c2b306b017065_48

eBook Cash Budget The controller of Shoe Mart Inc. asks you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: January February March Sales $148,000 $179,000 $238,000 Manufacturing costs 62,000 77,000 86,000 Selling and administrative expenses 43,000 48,000 52,000 Capital expenditures _ _ 57,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 65% are expected to be collected in full in the month following the sale and the remainder the following month. Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in June, and the annual property taxes are paid in October. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. All sales and administrative expenses are paid in the month incurred. Current assets as of January 1 include cash of $56,000, marketable securities of $80,000, and accounts receivable of $171,300 ($130,000 from December sales and $41,300 from November sales). Sales on account in November and December were $118,000 and $130,000, respectively. Current liabilities as of January 1 include a $74,000, 12%, 90-day note payable due March 20 and $7,000 of accounts payable incurred in December for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $4,400 in dividends will be received in January. An estimated income tax payment of $21,000 will be made in February. Shoe Mart's regular quarterly dividend of $7,000 is expected to be declared in February and paid in March. Management desires to maintain a minimum cash balance of $44,000. Required: 1. Prepare a monthly cash budget and supporting schedules for January, February, and March. Enter an increase in the month's cash balance or an excess cash amount as a positive number. Enter a decrease in the month's cash balance or a cash deficiency as a negative number. Assume 360 days per year for interest calculations. Shoe Mart Inc.Cash BudgetFor the Three Months Ending March 31 January February March Estimated cash receipts from: Cash sales $fill in the blank 49c2b306b017065_1 $fill in the blank 49c2b306b017065_2 $fill in the blank 49c2b306b017065_3 Collection of accounts receivable fill in the blank 49c2b306b017065_4 fill in the blank 49c2b306b017065_5 fill in the blank 49c2b306b017065_6 Dividends fill in the blank 49c2b306b017065_7 fill in the blank 49c2b306b017065_8 fill in the blank 49c2b306b017065_9 Total cash receipts $fill in the blank 49c2b306b017065_10 $fill in the blank 49c2b306b017065_11 $fill in the blank 49c2b306b017065_12 Estimated cash payments for: Manufacturing costs $fill in the blank 49c2b306b017065_13 $fill in the blank 49c2b306b017065_14 $fill in the blank 49c2b306b017065_15 Selling and administrative expenses fill in the blank 49c2b306b017065_16 fill in the blank 49c2b306b017065_17 fill in the blank 49c2b306b017065_18 Capital expenditures fill in the blank 49c2b306b017065_19 fill in the blank 49c2b306b017065_20 fill in the blank 49c2b306b017065_21 Other purposes: Note payable (including interest) fill in the blank 49c2b306b017065_22 fill in the blank 49c2b306b017065_23 fill in the blank 49c2b306b017065_24 Income tax fill in the blank 49c2b306b017065_25 fill in the blank 49c2b306b017065_26 fill in the blank 49c2b306b017065_27 Dividends fill in the blank 49c2b306b017065_28 fill in the blank 49c2b306b017065_29 fill in the blank 49c2b306b017065_30 Total cash payments $fill in the blank 49c2b306b017065_31 $fill in the blank 49c2b306b017065_32 $fill in the blank 49c2b306b017065_33 Cash increase (decrease) $fill in the blank 49c2b306b017065_34 $fill in the blank 49c2b306b017065_35 $fill in the blank 49c2b306b017065_36 Cash balance at beginning of month fill in the blank 49c2b306b017065_37 fill in the blank 49c2b306b017065_38 fill in the blank 49c2b306b017065_39 Cash balance at end of month $fill in the blank 49c2b306b017065_40 $fill in the blank 49c2b306b017065_41 $fill in the blank 49c2b306b017065_42 Minimum cash balance fill in the blank 49c2b306b017065_43 fill in the blank 49c2b306b017065_44 fill in the blank 49c2b306b017065_45 Excess (deficiency) $fill in the blank 49c2b306b017065_46 $fill in the blank 49c2b306b017065_47 fill in the blank 49c2b306b017065_48

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 5PB: Cash budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for...

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eBook

Cash Budget

The controller of Shoe Mart Inc. asks you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

	January	February	March
Sales	$148,000		$179,000	$238,000
Manufacturing costs	62,000		77,000	86,000
Selling and administrative expenses	43,000		48,000	52,000
Capital expenditures	_		_	57,000

The company expects to sell about 10% of its merchandise for cash. Of sales on account, 65% are expected to be collected in full in the month following the sale and the remainder the following month. Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in June, and the annual property taxes are paid in October. Of the remainder of the manufacturing costs, 85% are expected to be paid in the month in which they are incurred and the balance in the following month. All sales and administrative expenses are paid in the month incurred.

Current assets as of January 1 include cash of $56,000, marketable securities of $80,000, and accounts receivable of $171,300 ($130,000 from December sales and $41,300 from November sales). Sales on account in November and December were $118,000 and $130,000, respectively. Current liabilities as of January 1 include a $74,000, 12%, 90-day note payable due March 20 and $7,000 of accounts payable incurred in December for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $4,400 in dividends will be received in January. An estimated income tax payment of $21,000 will be made in February. Shoe Mart's regular quarterly dividend of $7,000 is expected to be declared in February and paid in March. Management desires to maintain a minimum cash balance of $44,000.

Required:

1. Prepare a monthly cash budget and supporting schedules for January, February, and March. Enter an increase in the month's cash balance or an excess cash amount as a positive number. Enter a decrease in the month's cash balance or a cash deficiency as a negative number. Assume 360 days per year for interest calculations.

Shoe Mart Inc.Cash BudgetFor the Three Months Ending March 31

	January	February	March
Estimated cash receipts from:
Cash sales	$fill in the blank 49c2b306b017065_1	$fill in the blank 49c2b306b017065_2	$fill in the blank 49c2b306b017065_3
Collection of accounts receivable	fill in the blank 49c2b306b017065_4	fill in the blank 49c2b306b017065_5	fill in the blank 49c2b306b017065_6
Dividends	fill in the blank 49c2b306b017065_7	fill in the blank 49c2b306b017065_8	fill in the blank 49c2b306b017065_9
Total cash receipts	$fill in the blank 49c2b306b017065_10	$fill in the blank 49c2b306b017065_11	$fill in the blank 49c2b306b017065_12
Estimated cash payments for:
Manufacturing costs	$fill in the blank 49c2b306b017065_13	$fill in the blank 49c2b306b017065_14	$fill in the blank 49c2b306b017065_15
Selling and administrative expenses	fill in the blank 49c2b306b017065_16	fill in the blank 49c2b306b017065_17	fill in the blank 49c2b306b017065_18
Capital expenditures	fill in the blank 49c2b306b017065_19	fill in the blank 49c2b306b017065_20	fill in the blank 49c2b306b017065_21
Other purposes:
Note payable (including interest)	fill in the blank 49c2b306b017065_22	fill in the blank 49c2b306b017065_23	fill in the blank 49c2b306b017065_24
Income tax	fill in the blank 49c2b306b017065_25	fill in the blank 49c2b306b017065_26	fill in the blank 49c2b306b017065_27
Dividends	fill in the blank 49c2b306b017065_28	fill in the blank 49c2b306b017065_29	fill in the blank 49c2b306b017065_30
Total cash payments	$fill in the blank 49c2b306b017065_31	$fill in the blank 49c2b306b017065_32	$fill in the blank 49c2b306b017065_33
Cash increase (decrease)	$fill in the blank 49c2b306b017065_34	$fill in the blank 49c2b306b017065_35	$fill in the blank 49c2b306b017065_36
Cash balance at beginning of month	fill in the blank 49c2b306b017065_37	fill in the blank 49c2b306b017065_38	fill in the blank 49c2b306b017065_39
Cash balance at end of month	$fill in the blank 49c2b306b017065_40	$fill in the blank 49c2b306b017065_41	$fill in the blank 49c2b306b017065_42
Minimum cash balance	fill in the blank 49c2b306b017065_43	fill in the blank 49c2b306b017065_44	fill in the blank 49c2b306b017065_45
Excess (deficiency)	$fill in the blank 49c2b306b017065_46	$fill in the blank 49c2b306b017065_47	fill in the blank 49c2b306b017065_48

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