Show Me How Cash Budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: September October November Sales $250,000 $300,000 $315,000 Manufacturing costs 150,000 180,000 185,000 Selling and administrative expenses 42,000 48,000 51,000 Capital expenditures _ _ 200,000 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 remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. 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 September 1 include cash of $40,000, marketable securities of $75,000, and accounts receivable of $300,000 ($60,000 from July sales and $240,000 from August sales). Sales on account for July and August were $200,000 and $240,000, respectively. Current liabilities as of September 1 include $40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $55,000 will be made in October. Bridgeport’s regular quarterly dividend of $25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $50,000. Required: 1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Enter all amounts as positive values except for overall cash decrease and deficiency which should be indicated with a minus sign. Bridgeport Housewares Inc. Cash Budget For the Three Months Ending November 30 September October November Estimated cash receipts from: Cash sales $fill in the blank 99c08cfd0fc5fff_2 $fill in the blank 99c08cfd0fc5fff_3 $fill in the blank 99c08cfd0fc5fff_4 Collection of accounts receivable fill in the blank 99c08cfd0fc5fff_6 fill in the blank 99c08cfd0fc5fff_7 fill in the blank 99c08cfd0fc5fff_8 Total cash receipts $fill in the blank 99c08cfd0fc5fff_9 $fill in the blank 99c08cfd0fc5fff_10 $fill in the blank 99c08cfd0fc5fff_11 Less estimated cash payments for: Manufacturing costs $fill in the blank 99c08cfd0fc5fff_13 $fill in the blank 99c08cfd0fc5fff_14 $fill in the blank 99c08cfd0fc5fff_15 Selling and administrative expenses fill in the blank 99c08cfd0fc5fff_17 fill in the blank 99c08cfd0fc5fff_18 fill in the blank 99c08cfd0fc5fff_19 Capital expenditures fill in the blank 99c08cfd0fc5fff_21 Other purposes: Income tax fill in the blank 99c08cfd0fc5fff_23 Dividends fill in the blank 99c08cfd0fc5fff_25 Total cash payments $fill in the blank 99c08cfd0fc5fff_26 $fill in the blank 99c08cfd0fc5fff_27 $fill in the blank 99c08cfd0fc5fff_28 Cash increase or (decrease) $fill in the blank 99c08cfd0fc5fff_30 $fill in the blank 99c08cfd0fc5fff_31 $fill in the blank 99c08cfd0fc5fff_32 Plus cash balance at beginning of month fill in the blank 99c08cfd0fc5fff_34 fill in the blank 99c08cfd0fc5fff_35 fill in the blank 99c08cfd0fc5fff_36 Cash balance at end of month $fill in the blank 99c08cfd0fc5fff_37 $fill in the blank 99c08cfd0fc5fff_38 $fill in the blank 99c08cfd0fc5fff_39 Less minimum cash balance fill in the blank 99c08cfd0fc5fff_41 fill in the blank 99c08cfd0fc5fff_42 fill in the blank 99c08cfd0fc5fff_43 Excess or (deficiency) $fill in the blank 99c08cfd0fc5fff_44 $fill in the blank 99c08cfd0fc5fff_45 $fill in the blank 99c08cfd0fc5fff_46

Show Me How Cash Budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: September October November Sales $250,000 $300,000 $315,000 Manufacturing costs 150,000 180,000 185,000 Selling and administrative expenses 42,000 48,000 51,000 Capital expenditures _ _ 200,000 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 remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. 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 September 1 include cash of $40,000, marketable securities of $75,000, and accounts receivable of $300,000 ($60,000 from July sales and $240,000 from August sales). Sales on account for July and August were $200,000 and $240,000, respectively. Current liabilities as of September 1 include $40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $55,000 will be made in October. Bridgeport’s regular quarterly dividend of $25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $50,000. Required: 1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Enter all amounts as positive values except for overall cash decrease and deficiency which should be indicated with a minus sign. Bridgeport Housewares Inc. Cash Budget For the Three Months Ending November 30 September October November Estimated cash receipts from: Cash sales $fill in the blank 99c08cfd0fc5fff_2 $fill in the blank 99c08cfd0fc5fff_3 $fill in the blank 99c08cfd0fc5fff_4 Collection of accounts receivable fill in the blank 99c08cfd0fc5fff_6 fill in the blank 99c08cfd0fc5fff_7 fill in the blank 99c08cfd0fc5fff_8 Total cash receipts $fill in the blank 99c08cfd0fc5fff_9 $fill in the blank 99c08cfd0fc5fff_10 $fill in the blank 99c08cfd0fc5fff_11 Less estimated cash payments for: Manufacturing costs $fill in the blank 99c08cfd0fc5fff_13 $fill in the blank 99c08cfd0fc5fff_14 $fill in the blank 99c08cfd0fc5fff_15 Selling and administrative expenses fill in the blank 99c08cfd0fc5fff_17 fill in the blank 99c08cfd0fc5fff_18 fill in the blank 99c08cfd0fc5fff_19 Capital expenditures fill in the blank 99c08cfd0fc5fff_21 Other purposes: Income tax fill in the blank 99c08cfd0fc5fff_23 Dividends fill in the blank 99c08cfd0fc5fff_25 Total cash payments $fill in the blank 99c08cfd0fc5fff_26 $fill in the blank 99c08cfd0fc5fff_27 $fill in the blank 99c08cfd0fc5fff_28 Cash increase or (decrease) $fill in the blank 99c08cfd0fc5fff_30 $fill in the blank 99c08cfd0fc5fff_31 $fill in the blank 99c08cfd0fc5fff_32 Plus cash balance at beginning of month fill in the blank 99c08cfd0fc5fff_34 fill in the blank 99c08cfd0fc5fff_35 fill in the blank 99c08cfd0fc5fff_36 Cash balance at end of month $fill in the blank 99c08cfd0fc5fff_37 $fill in the blank 99c08cfd0fc5fff_38 $fill in the blank 99c08cfd0fc5fff_39 Less minimum cash balance fill in the blank 99c08cfd0fc5fff_41 fill in the blank 99c08cfd0fc5fff_42 fill in the blank 99c08cfd0fc5fff_43 Excess or (deficiency) $fill in the blank 99c08cfd0fc5fff_44 $fill in the blank 99c08cfd0fc5fff_45 $fill in the blank 99c08cfd0fc5fff_46

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 5PA: Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash...

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Show Me How

Cash Budget

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

	September	October	November
Sales	$250,000		$300,000	$315,000
Manufacturing costs	150,000		180,000	185,000
Selling and administrative expenses	42,000		48,000	51,000
Capital expenditures	_		_	200,000

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 remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. 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 September 1 include cash of $40,000, marketable securities of $75,000, and accounts receivable of $300,000 ($60,000 from July sales and $240,000 from August sales). Sales on account for July and August were $200,000 and $240,000, respectively. Current liabilities as of September 1 include $40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $55,000 will be made in October. Bridgeport’s regular quarterly dividend of $25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $50,000.

Required:

1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Enter all amounts as positive values except for overall cash decrease and deficiency which should be indicated with a minus sign.

Bridgeport Housewares Inc.
Cash Budget
For the Three Months Ending November 30
	September	October	November
Estimated cash receipts from:
Cash sales	$fill in the blank 99c08cfd0fc5fff_2	$fill in the blank 99c08cfd0fc5fff_3	$fill in the blank 99c08cfd0fc5fff_4
Collection of accounts receivable	fill in the blank 99c08cfd0fc5fff_6	fill in the blank 99c08cfd0fc5fff_7	fill in the blank 99c08cfd0fc5fff_8
Total cash receipts	$fill in the blank 99c08cfd0fc5fff_9	$fill in the blank 99c08cfd0fc5fff_10	$fill in the blank 99c08cfd0fc5fff_11
Less estimated cash payments for:
Manufacturing costs	$fill in the blank 99c08cfd0fc5fff_13	$fill in the blank 99c08cfd0fc5fff_14	$fill in the blank 99c08cfd0fc5fff_15
Selling and administrative expenses	fill in the blank 99c08cfd0fc5fff_17	fill in the blank 99c08cfd0fc5fff_18	fill in the blank 99c08cfd0fc5fff_19
Capital expenditures			fill in the blank 99c08cfd0fc5fff_21
Other purposes:
Income tax		fill in the blank 99c08cfd0fc5fff_23
Dividends			fill in the blank 99c08cfd0fc5fff_25
Total cash payments	$fill in the blank 99c08cfd0fc5fff_26	$fill in the blank 99c08cfd0fc5fff_27	$fill in the blank 99c08cfd0fc5fff_28
Cash increase or (decrease)	$fill in the blank 99c08cfd0fc5fff_30	$fill in the blank 99c08cfd0fc5fff_31	$fill in the blank 99c08cfd0fc5fff_32
Plus cash balance at beginning of month	fill in the blank 99c08cfd0fc5fff_34	fill in the blank 99c08cfd0fc5fff_35	fill in the blank 99c08cfd0fc5fff_36
Cash balance at end of month	$fill in the blank 99c08cfd0fc5fff_37	$fill in the blank 99c08cfd0fc5fff_38	$fill in the blank 99c08cfd0fc5fff_39
Less minimum cash balance	fill in the blank 99c08cfd0fc5fff_41	fill in the blank 99c08cfd0fc5fff_42	fill in the blank 99c08cfd0fc5fff_43
Excess or (deficiency)	$fill in the blank 99c08cfd0fc5fff_44	$fill in the blank 99c08cfd0fc5fff_45	$fill in the blank 99c08cfd0fc5fff_46

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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