Prepare a cash budget for January and February in columnar form. Please answer in detail with all working please answer in text not image (a)Your answer is correct.Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases forJanuary and February.NovemberDecemberJanuaryFebruaryTotal collectionsDecemberJanuaryFebruaryTotal paymentsExpected Collections from CustomersJanuary19$65000January124800234000Expected Payments for Direct Materials423800$52000 $93600145600SFebruaryFebruary832001404002600004836006240097500159900 Wildhorse Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows.SalesDirect materials purchasesDirect laborManufacturing overhead91,000Selling and administrative expenses 102,700All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of directmaterials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling andadministrative expenses that include $1,300 of depreciation per month.Other data:1234.(a)Credit sales: November 2021, $325,000: December 2021, $416,000.Purchases of direct materials: December 2021, $130,000.Other receipts: January-Collection of December 31, 2021, notes receivable $19.500; February-Proceeds from sale of securities $7,800.Other disbursements: February-Payment of $7,800 cash dividend.The company's cash balance on January 1, 2022, is expected to be $78,000. The company wants to maintain a minimum cash balance of $65,000.Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.NovemberJanuaryFebruary$468,000 $520,000156,000 162,500117,000130,00097,500110,500DecemberJanuaryFebruaryExpected Collections from CustomersJanuary$Total collections $$FebruaryAcGo

Cash budget is one of important budget being prepared in business. It shows expected cash receipts,…

Answered: Prepare a cash budget for January and…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 4P

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Prepare a cash budget for January and February in columnar form. Please answer in detail with all working please answer in text not image

(a)
Your answer is correct.
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for
January and February.
November
December
January
February
Total collections
December
January
February
Total payments
Expected Collections from Customers
January
19
$
65000
January
124800
234000
Expected Payments for Direct Materials
423800
$
52000 $
93600
145600
S
February
February
83200
140400
260000
483600
62400
97500
159900

Wildhorse Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows.
Sales
Direct materials purchases
Direct labor
Manufacturing overhead
91,000
Selling and administrative expenses 102,700
All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct
materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and
administrative expenses that include $1,300 of depreciation per month.
Other data:
1
2
3
4.
(a)
Credit sales: November 2021, $325,000: December 2021, $416,000.
Purchases of direct materials: December 2021, $130,000.
Other receipts: January-Collection of December 31, 2021, notes receivable $19.500; February-Proceeds from sale of securities $7,800.
Other disbursements: February-Payment of $7,800 cash dividend.
The company's cash balance on January 1, 2022, is expected to be $78,000. The company wants to maintain a minimum cash balance of $65,000.
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.
November
January
February
$468,000 $520,000
156,000 162,500
117,000
130,000
97,500
110,500
December
January
February
Expected Collections from Customers
January
$
Total collections $
$
February
Ac
Go

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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