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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 $103,000 $122,000 $166,000 Manufacturing costs 43,000 52,000 60,000 Selling and administrative expenses 30,000 33,000 37,000 Capital expenditures 40,000 The company expects to sell about 12% of its merchandise for cash. Of sales on account, 65% 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 $6,000 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 $39,000, marketable securities of $56,000, and accounts receivable of $118,700 ($90,000 from April sales and $28,700 from March sales). Sales on account for March and April were $82,000 and $90,000, respectively. Current liabilities as of May 1 include $13,500 of accounts payable incurred 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 $15,000 will be made in June. Sonoma's regular quarterly dividend of $6,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $30,000. 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 $103,000 $122,000 $166,000 Manufacturing costs 43,000 52,000 60,000 Selling and administrative expenses 30,000 33,000 37,000 Capital expenditures 40,000 The company expects to sell about 12% of its merchandise for cash. Of sales on account, 65% 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 $6,000 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 $39,000, marketable securities of $56,000, and accounts receivable of $118,700 ($90,000 from April sales and $28,700 from March sales). Sales on account for March and April were $82,000 and $90,000, respectively. Current liabilities as of May 1 include $13,500 of accounts payable incurred 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 $15,000 will be made in June. Sonoma's regular quarterly dividend of $6,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $30,000. 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
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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I set my collectiosn of accounts as May-28700+58500,June 31500+66950, July 36050+79300. I must be missing something because it is wrong. Please help me fix the wrong answers. Thank you

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 $103,000 $122,000 $166,000 Manufacturing costs 43,000 52,000 60,000 Selling and administrative expenses 30,000 33,000 37,000 Capital expenditures 40,000 The company expects to sell about 12% of its merchandise for cash. Of sales on account, 65% 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 $6,000 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 $39,000, marketable securities of $56,000, and accounts receivable of $118,700 ($90,000 from April sales and $28,700 from March sales). Sales on account for March and April were $82,000 and $90,000, respectively. Current liabilities as of May 1 include $13,500 of accounts payable incurred 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 $15,000 will be made in June. Sonoma's regular quarterly dividend of $6,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $30,000. 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.
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 $103,000 $122,000 $166,000 Manufacturing costs 43,000 52,000 60,000 Selling and administrative expenses 30,000 33,000 37,000 Capital expenditures 40,000 The company expects to sell about 12% of its merchandise for cash. Of sales on account, 65% 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 $6,000 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 $39,000, marketable securities of $56,000, and accounts receivable of $118,700 ($90,000 from April sales and $28,700 from March sales). Sales on account for March and April were $82,000 and $90,000, respectively. Current liabilities as of May 1 include $13,500 of accounts payable incurred 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 $15,000 will be made in June. Sonoma's regular quarterly dividend of $6,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $30,000. 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.
Sonoma Housewares Inc. Cash Budget For the Three Months Ending July 31 May June July Estimated cash receipts from: Cash sales 12,360 14,640 V $ 19,920 Collection of accounts receivable 68,340 X 98,450 X 115,350 X Total cash receipts 80,700 x 113,090 x $ 135,270 X Estimated cash payments for: Manufacturing costs 27,500 x 101,600 x $ 58,400 X Selling and administrative expenses 30,000 V 33,000 37,000 Capital expenditures 40,000 Other purposes: Income tax 15,000 Dividends 6,000 Total cash payments 37,500 x $ 149,600 X $ 141,400 X Cash increase or (decrease) 43,200| Х $ 36,510 | х $ -6,130 X Cash balance at beginning of month 39,000 V 82,200 X 118,710 X Cash balance at end of month 82,200 X 118,710 | Х $112,580|х Minimum cash balance 30,000 30,000 30,000 Excess (deficiency) 52,200 X 88,710 X $ 82,580 X X >
Transcribed Image Text:Sonoma Housewares Inc. Cash Budget For the Three Months Ending July 31 May June July Estimated cash receipts from: Cash sales 12,360 14,640 V $ 19,920 Collection of accounts receivable 68,340 X 98,450 X 115,350 X Total cash receipts 80,700 x 113,090 x $ 135,270 X Estimated cash payments for: Manufacturing costs 27,500 x 101,600 x $ 58,400 X Selling and administrative expenses 30,000 V 33,000 37,000 Capital expenditures 40,000 Other purposes: Income tax 15,000 Dividends 6,000 Total cash payments 37,500 x $ 149,600 X $ 141,400 X Cash increase or (decrease) 43,200| Х $ 36,510 | х $ -6,130 X Cash balance at beginning of month 39,000 V 82,200 X 118,710 X Cash balance at end of month 82,200 X 118,710 | Х $112,580|х Minimum cash balance 30,000 30,000 30,000 Excess (deficiency) 52,200 X 88,710 X $ 82,580 X X >
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