Floss Company has $13,000 in cash on hand on January 1 and has collected the following budget data:Assume Floss has cash payments for selling and administrative expenses including salaries of $66,000 plus commissions of 2% of sales, all paid in the month of sale. The company requires a minimum cash balance of $11,000. Prepare a cash budget for January and February. Will Floss need to borrow cash by the end of February? Beginning bye preparing the cash budget for January, then the cash budget for February. (Complete all input fields. Enter a “0” for any zero balances. ) Floss CompanyCash BudgetTwo Months Ended January 31 and February 28JanuaryBeginning cash balanceCash receiptsCash availableCash payments:Purchases of merchandise inventorySelling and administrative expensesTotal cash paymentsEnding cash balance before financingMinimum cash balance desiredProjected cash excess (deficiency)Financing:BorrowingPrincipal repaymentsTotal effects of financingEnding cash balance Data TableJanuaryFebruarySales1,300,000 $650,000Cash receipts from customers851,850871,900Cash payments for merchandise inventory561,300532,278PrintDone%24

Cash budget of the organisation shows budgeted cash receipts and cash disbursements that are…

Answered: Floss Company has $13,000 in cash on…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...

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Floss Company has $13,000 in cash on hand on January 1 and has collected the following budget data: Assume Floss has cash payments for selling and administrative expenses including salaries of $66,000 plus commissions of 2% of sales, all paid in the month of sale. The company requires a minimum cash balance of $11,000. Prepare a cash budget for January and February. Will Floss need to borrow cash by the end of February? Beginning bye preparing the cash budget for January, then the cash budget for February. (Complete all input fields. Enter a “0” for any zero balances. )

Floss Company
Cash Budget
Two Months Ended January 31 and February 28
January
Beginning cash balance
Cash receipts
Cash available
Cash payments:
Purchases of merchandise inventory
Selling and administrative expenses
Total cash payments
Ending cash balance before financing
Minimum cash balance desired
Projected cash excess (deficiency)
Financing:
Borrowing
Principal repayments
Total effects of financing
Ending cash balance

Data Table
January
February
Sales
1,300,000 $
650,000
Cash receipts from customers
851,850
871,900
Cash payments for merchandise inventory
561,300
532,278
Print
Done
%24

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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