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The Finance officer of Your Natural Romance Co asked for a CASH BUDGET given the following data: October $320,000 132,000 November $370,000 164,000 92,000 December $400,000 210,000 102,000 240,000 Sales Operating Costs Selling and Administrative Expenses 80,000 Capital Expenses Among the sales figures, only 90% are treated as receivables, with the other value as down payment. Six tenths of the receivables are collected in the following month and the rest a month further. Semiannual depreciation costs $144,000. Of the remaining operating costs, 80% will be paid in the month they are incurred and the rest, a month after. Current assets as of October 1 include cash of $84,000, marketable securities of $50,000 and accounts receivable of $396,000 ($300,000 from September sales and $96,000 from August Sales). Sales on account in August and September were $240,000 and $300,000 respectively. Current liabilities as of October 1 include $26,000 of accounts payable in September for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax of $48,000 will be made in November. The quarterly dividend is expected to be declared in November and paid in December. Management wishes to maintain a minimum cash balance of $80,000. Construct a cash budget for the three months mentioned. Put the corresponding notes as may be applicable (Note A, Note B, etc)

The Finance officer of Your Natural Romance Co asked for a CASH BUDGET given the following data: October $320,000 132,000 November $370,000 164,000 92,000 December $400,000 210,000 102,000 240,000 Sales Operating Costs Selling and Administrative Expenses 80,000 Capital Expenses Among the sales figures, only 90% are treated as receivables, with the other value as down payment. Six tenths of the receivables are collected in the following month and the rest a month further. Semiannual depreciation costs $144,000. Of the remaining operating costs, 80% will be paid in the month they are incurred and the rest, a month after. Current assets as of October 1 include cash of $84,000, marketable securities of $50,000 and accounts receivable of $396,000 ($300,000 from September sales and $96,000 from August Sales). Sales on account in August and September were $240,000 and $300,000 respectively. Current liabilities as of October 1 include $26,000 of accounts payable in September for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax of $48,000 will be made in November. The quarterly dividend is expected to be declared in November and paid in December. Management wishes to maintain a minimum cash balance of $80,000. Construct a cash budget for the three months mentioned. Put the corresponding notes as may be applicable (Note A, Note B, etc)

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 Finance officer of Your Natural Romance Co asked for a CASH BUDGET given the following data: October November December $320,000 132,000 $370,000 164,000 92,000 Sales $400,000 210,000 102,000 240,000 Operating Costs Selling and Administrative Expenses 80,000 Capital Expenses Among the sales figures, only 90% are treated as receivables, with the other value as down payment. Six tenths of the receivables are collected in the following month and the rest a month further. Semiannual depreciation costs $144,000. Of the remaining operating costs, 80% will be paid in the month they are incurred and the rest, a month after. Current assets as of October 1 include cash of $84,000, marketable securities of $50,000 and accounts receivable of $396,000 ($300,000 from September sales and $96,000 from August Sales). Sales on account in August and September were $240,000 and $300,000 respectively. Current liabilities as of October 1 include $26,000 of accounts payable in September for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax of $48,000 will be made in November. The quarterly dividend is expected to be declared in November and paid in December. Management wishes to maintain a minimum cash balance of $80,000. Construct a cash budget for the three months mentioned. Put the corresponding notes as may be applicable (Note A, Note B, etc)
Transcribed Image Text:. The Finance officer of Your Natural Romance Co asked for a CASH BUDGET given the following data: October November December $320,000 132,000 $370,000 164,000 92,000 Sales $400,000 210,000 102,000 240,000 Operating Costs Selling and Administrative Expenses 80,000 Capital Expenses Among the sales figures, only 90% are treated as receivables, with the other value as down payment. Six tenths of the receivables are collected in the following month and the rest a month further. Semiannual depreciation costs $144,000. Of the remaining operating costs, 80% will be paid in the month they are incurred and the rest, a month after. Current assets as of October 1 include cash of $84,000, marketable securities of $50,000 and accounts receivable of $396,000 ($300,000 from September sales and $96,000 from August Sales). Sales on account in August and September were $240,000 and $300,000 respectively. Current liabilities as of October 1 include $26,000 of accounts payable in September for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax of $48,000 will be made in November. The quarterly dividend is expected to be declared in November and paid in December. Management wishes to maintain a minimum cash balance of $80,000. Construct a cash budget for the three months mentioned. Put the corresponding notes as may be applicable (Note A, Note B, etc)
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