Respuesta :
Answer:
1. Expected Collections from Customers for January is $326,000 and February $372,000
2. Expected Payments for Direct Materials for January is $112,000 and February $123,000
3. Ending Amount required (to make ending balance =$50,000) for January is 0 and February is $9.000. Cash Budget prepared in explanation below.
Explanation:
Schedule for Expected Collections & Payments and Cash Budget prepared below. Moreover, please note that all totaling amounts have been marked in Bold Letters.
1. Schedule of expected customer collections for January and February.
Particulars January February
50% of current month sales 180,000 200,000
30% in of previous month' s sales (i.e., 30% of December's sales, 30% of January's sales) 96,000 108,000
20% of before previous month's sale (20%
of November's sale, 20%of December's sales) 50,000 64,000
Total cash collections from customers 326,000 372,000
2. Expected payments for direct material purchases:
Particulars January February
60 % of current month's purchases 72,000 75,000
40% of previous months purchases (i.e 40%
of December's purchase, 40% of January's purchase) 40,000 48,000
Total payments for purchases 112,000 123,000
3.Cash budget for the months January and February:
Particulars January February
Cash Receipts:
Collections from customers (from 1 above) 326,000 372,000
Collection of notes receivable 15,000 0
Sale of securities 0 6000
Total cash receipts 341,000 378,000
Add: opening balance $60,000 51,000
Total cash receipts and opening balance $401,000 429,000
Cash payments:
Expected payments for purchases (from 2 above) 112,000 123,000
DIrect labour 90,000 100,000
manufacturing overhead 70,000 75,000
Selling and administration expenses (less $1,000) 78,000 84,000
Cash dividends 0 6,000
Total cash payments 350,000 388,000
Ending cash balance (receipts +
opening balance -payments) $51,000 $41,000
Amount to be borrowed (to make
ending balance =$50,000) 0 $9,000
Final ending balance of cash $51,000 $50,000
