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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 $89.000 $109.000 $146.000 37,000 47,000 53,000 31.000 33.000 55.000 35,000 Sales Manufacturing costs Selling and administrative expenses Capital expenditures 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 $7,000 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 $34,000, marketable securities of $48.000, and accounts receivable of $99.300 ($21.300 from July sales and $78.000 from August sales). Sales on account for July and August were $71.000 and $78.000, respectively. Current liabilities as of September 1 include $7.000 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 $13.000 will be made in October. Bridgeport's regular quarterly dividend of $7,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $33,000. Required: 1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume 360 days per year for interest calculations. Bridgeport Housewares Inc. Cash Budget For the Three Months Ending November 30 Line Item Description Estimated cash receipts from: Total cash receipts Less estimated cash payments for: Other purposes: Total cash payments Cash balance at end of month Excess or (deficiency) September October November 00 1000 Q0000 0 00000 000 000 0000000 000000

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 $89.000 $109.000 $146.000 37,000 47,000 53,000 31.000 33.000 55.000 35,000 Sales Manufacturing costs Selling and administrative expenses Capital expenditures 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 $7,000 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 $34,000, marketable securities of $48.000, and accounts receivable of $99.300 ($21.300 from July sales and $78.000 from August sales). Sales on account for July and August were $71.000 and $78.000, respectively. Current liabilities as of September 1 include $7.000 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 $13.000 will be made in October. Bridgeport's regular quarterly dividend of $7,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $33,000. Required: 1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume 360 days per year for interest calculations. Bridgeport Housewares Inc. Cash Budget For the Three Months Ending November 30 Line Item Description Estimated cash receipts from: Total cash receipts Less estimated cash payments for: Other purposes: Total cash payments Cash balance at end of month Excess or (deficiency) September October November 00 1000 Q0000 0 00000 000 000 0000000 000000

Managerial Accounting
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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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 $89,000 $109,000 $146,000 37,000 47,000 31,000 33,000 Sales Manufacturing costs Selling and administrative expenses Capital expenditures 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 $7,000 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 $34,000, marketable securities of $48,000, and accounts receivable of $99,300 ($21,300 from July sales and $78,000 from August sales). Sales on account for July and August were $71,000 and $78,000, respectively. Current liabilities as of September 1 include $7,000 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 $13,000 will be made in October. Bridgeport's regular quarterly dividend of $7,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $33,000. Required: 1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume 360 days per year for interest calculations. Bridgeport Housewares Inc. Cash Budget For the Three Months Ending November 30 September Line Item Description Estimated cash receipts from: Total cash receipts Less estimated cash payments for: Other purposes: Total cash payments 53,000 55,000 35,000 Cash balance at end of month Excess or (deficiency) October November QQ0 0 000000 000000 000000000000
Transcribed Image Text: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 $89,000 $109,000 $146,000 37,000 47,000 31,000 33,000 Sales Manufacturing costs Selling and administrative expenses Capital expenditures 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 $7,000 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 $34,000, marketable securities of $48,000, and accounts receivable of $99,300 ($21,300 from July sales and $78,000 from August sales). Sales on account for July and August were $71,000 and $78,000, respectively. Current liabilities as of September 1 include $7,000 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 $13,000 will be made in October. Bridgeport's regular quarterly dividend of $7,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $33,000. Required: 1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume 360 days per year for interest calculations. Bridgeport Housewares Inc. Cash Budget For the Three Months Ending November 30 September Line Item Description Estimated cash receipts from: Total cash receipts Less estimated cash payments for: Other purposes: Total cash payments 53,000 55,000 35,000 Cash balance at end of month Excess or (deficiency) October November QQ0 0 000000 000000 000000000000
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