The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $135,000 $159,000 $227,000 Manufacturing costs 57,000 68,000 82,000 Selling and administrative expenses 39,000 43,000 50,000 Capital expenditures 54,000 The company expects to sell about 15% 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 September, and the annual property taxes are pald in November. Of the remainder of the manufacturing costs, B5% are expected to be pald in the month in which they are incurred and the balance in the following month. Current assets as of May 1 include cash of $51,000, marketable securities of $73,000, and accounts receivable of $150,400 ($118,000 from April sales and $32,400 from March sales). Sales on account for March and April were $108,000 and $118,000, respectively. Current liabilities as of May 1 include $15,000 of accounts payable incurre in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated Income tax payment of 519,000 wl be made in June. Sonoma's regular quarterly dividend of $7,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $40,000. Required: 1. Prepare a monthly cash budget and supporting schedules for May, June, and July. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign.
The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $135,000 $159,000 $227,000 Manufacturing costs 57,000 68,000 82,000 Selling and administrative expenses 39,000 43,000 50,000 Capital expenditures 54,000 The company expects to sell about 15% 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 September, and the annual property taxes are pald in November. Of the remainder of the manufacturing costs, B5% are expected to be pald in the month in which they are incurred and the balance in the following month. Current assets as of May 1 include cash of $51,000, marketable securities of $73,000, and accounts receivable of $150,400 ($118,000 from April sales and $32,400 from March sales). Sales on account for March and April were $108,000 and $118,000, respectively. Current liabilities as of May 1 include $15,000 of accounts payable incurre in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated Income tax payment of 519,000 wl be made in June. Sonoma's regular quarterly dividend of $7,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $40,000. Required: 1. Prepare a monthly cash budget and supporting schedules for May, June, and July. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign.
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...
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget
information:
May
June
July
Sales
$135,000 $159,000 $227,000
Manufacturing costs
57,000
68,000
82,000
Selling and administrative expenses
39,000
43,000
50,000
Capital expenditures
54,000
The company expects to sell about 15% 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 September, and the annual property taxes are pald in November. Of the remainder of the manufacturing
costs, B5% are expected to be pald in the month in which they are incurred and the balance in the following month.
Current assets as of May 1 include cash of $51,000, marketable securities of $73,000, and accounts receivable of $150,400 ($118,000 from April sales and $32,400 from
March sales). Sales on account for March and April were $108,000 and $118,000, respectively. Current liabilities as of May 1 include $15,000 of accounts payable incurre
in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated Income tax payment of 519,000 wl
be made in June. Sonoma's regular quarterly dividend of $7,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash
balance of $40,000.
Required:
1. Prepare a monthly cash budget and supporting schedules for May, June, and July. Input all amounts as positive values except overall cash decrease and deficiency
which should be indicated with a minus sign.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Expert Answers to Latest Homework Questions
Q: None
Q: what is the resultant vector when you follow directions that tell you to walk 225m in one direction,…
Q: None
Q: 1. (cos5 2x sin5 2x) dx
2. (tan5 4x tan² 2x sec2x)dx
3. (sin 5x cos 5x)dx
Q: Asst. Lec. Mohanad Qays
Engineering Mechanics
H.W1/ The 100-kg pot is supported from A by the three…
Q: Required information
[The following information applies to the questions displayed below.]
Hudson…
Q: Please don't provide handwritten solution ...
Q: Please don't provide handwritten solution .... Help me.
Q: amplitude ratio M, and resonant frequency w, for any arbitrary value of c. Generate a plot for w,…
Q: None
Q: None
Q: An analytical chemist is titrating 143.4 mL of a 0.3300M solution of diethylamine ((C2H5)2NH) with a…
Q: Submit Answer
Estimate the magnification and focal length of the pitcher of water shown in the…
Q: None
Q: A6 please help.....
Q: None
Q: None
Q: None
Q: None
Q: A6 please help....
Q: Find the wattmeter readings please answer in typing format