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PR 22-4A Cash budget OBJ.S The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash bud- get for the next three months. You are presented with the following budget information: Sales....... Manufacturing costs.... Selling and administrative expenses. Capital expenditures. May June July $86,000 $90,000 $95,000 34,000 39,000 44,000 15,000 16,000 22,000 80,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the re- mainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $3,500 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of May 1 include cash of $33,000, marketable securities of $40,000, and accounts receivable of $90,000 ($72,000 from April sales and $18,000 from March sales). Sales on account for March and April were $60,000 and $72,000, respectively. Current liabilities as of May 1 include $6,000 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the pe- riod they are incurred. An estimated income tax payment of $14,000 will be made in June. Sonoma's regular quarterly dividend of $5,000 is expected to be declared in June and paid in July. Management desires to maintain a minimum cash balance of $30,000. Instructions 1. Prepare a monthly cash budget and supporting schedules for May, June, and July 2016.

PR 22-4A Cash budget OBJ.S The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash bud- get for the next three months. You are presented with the following budget information: Sales....... Manufacturing costs.... Selling and administrative expenses. Capital expenditures. May June July $86,000 $90,000 $95,000 34,000 39,000 44,000 15,000 16,000 22,000 80,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the re- mainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $3,500 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of May 1 include cash of $33,000, marketable securities of $40,000, and accounts receivable of $90,000 ($72,000 from April sales and $18,000 from March sales). Sales on account for March and April were $60,000 and $72,000, respectively. Current liabilities as of May 1 include $6,000 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the pe- riod they are incurred. An estimated income tax payment of $14,000 will be made in June. Sonoma's regular quarterly dividend of $5,000 is expected to be declared in June and paid in July. Management desires to maintain a minimum cash balance of $30,000. Instructions 1. Prepare a monthly cash budget and supporting schedules for May, June, and July 2016.

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter4: Internal Control And Cash
Section: Chapter Questions
Problem 66.1C
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please read instructions on PR22-4A and answer on the execl sheet. Thanks for your time!

PROBLEM 22-4A Question 1 ONLY Sonoma Housewares, Inc. Cash Budget For the Three Months Ending July 31, 2021 Estimated cash receipts from: Cash sales Collection of accounts receivable Total cash receipts Estimated cash payments for: Manufacturing costs Selling and administrative expenses Capital expenditures Other purposes: Income tax Dividends Total cash payments Cash increase or (decrease) Cash balance at beginning of month Cash balance at end of month Minimum cash balance Excess or (deficiency) May 77400 June 81000 July 85500
Transcribed Image Text:PROBLEM 22-4A Question 1 ONLY Sonoma Housewares, Inc. Cash Budget For the Three Months Ending July 31, 2021 Estimated cash receipts from: Cash sales Collection of accounts receivable Total cash receipts Estimated cash payments for: Manufacturing costs Selling and administrative expenses Capital expenditures Other purposes: Income tax Dividends Total cash payments Cash increase or (decrease) Cash balance at beginning of month Cash balance at end of month Minimum cash balance Excess or (deficiency) May 77400 June 81000 July 85500
Instructions 1. Prepare a sales budget for January. 2. Prepare a production budget for January. 3. Prepare a direct materials purchases budget for January. 4. Prepare a direct labor cost budget for January. 5. Prepare a factory overhead cost budget for January. 6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $33,600, and work in process at the end of January is estimated to be $41,200. 7. Prepare a selling and administrative expenses budget for January. 8. Prepare a budgeted income statement for January. PR 22-4A Cash budget OBJ.S The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash bud- get for the next three months. You are presented with the following budget information: Sales. Manufacturing costs... Selling and administrative expenses. Capital expenditures ********** May $86,000 34,000 15,000 June July $90,000 $95,000 39,000 44,000 16,000 22,000 80,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the re- mainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $3,500 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of May 1 include cash of $33,000, marketable securities of $40,000, and accounts receivable of $90,000 ($72,000 from April sales and $18,000 from March sales). Sales on account for March and April were $60,000 and $72,000, respectively. Current liabilities as of May 1 include $6,000 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the pe- riod they are incurred. An estimated income tax payment of $14,000 will be made in June. Sonoma's regular quarterly dividend of $5,000 is expected to be declared in June and paid in July. Management desires to maintain a minimum cash balance of $30,000. Instructions 1. Prepare a monthly cash budget and supporting schedules for May, June, and July 2016.
Transcribed Image Text:Instructions 1. Prepare a sales budget for January. 2. Prepare a production budget for January. 3. Prepare a direct materials purchases budget for January. 4. Prepare a direct labor cost budget for January. 5. Prepare a factory overhead cost budget for January. 6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $33,600, and work in process at the end of January is estimated to be $41,200. 7. Prepare a selling and administrative expenses budget for January. 8. Prepare a budgeted income statement for January. PR 22-4A Cash budget OBJ.S The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash bud- get for the next three months. You are presented with the following budget information: Sales. Manufacturing costs... Selling and administrative expenses. Capital expenditures ********** May $86,000 34,000 15,000 June July $90,000 $95,000 39,000 44,000 16,000 22,000 80,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the re- mainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $3,500 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of May 1 include cash of $33,000, marketable securities of $40,000, and accounts receivable of $90,000 ($72,000 from April sales and $18,000 from March sales). Sales on account for March and April were $60,000 and $72,000, respectively. Current liabilities as of May 1 include $6,000 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the pe- riod they are incurred. An estimated income tax payment of $14,000 will be made in June. Sonoma's regular quarterly dividend of $5,000 is expected to be declared in June and paid in July. Management desires to maintain a minimum cash balance of $30,000. Instructions 1. Prepare a monthly cash budget and supporting schedules for May, June, and July 2016.
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