Bramble Corp. prepares monthly cash budgets. Here are relevant data from operati
ID: 2409109 • Letter: B
Question
Bramble Corp. prepares monthly cash budgets. Here are relevant data from operating budgets for 2017 January Februa Sales Purchases Salaries Administrative expenses Selling expenses rY $361,500 $401,100 130,500 81,000 73,800 87,600 120,300 84,800 71,300 78,700 All sales and purchases are on account. Budgeted collections and disbursement data are given below. All other expenses are paid in the month incurred except for administrative expenses, which include $1,200 of depreciation per month Other data 1. Collections from customers: January $329,800; February $379,000 2. Payments for purchases: January $101,900; February $140,000 3. Other receipts: January: collection of December 31, 2016, notes receivable $18,700; February: proceeds from sale of securities $5,100 4. Other disbursements: February $13,000 cash dividend The company's cash balance on January 1, 2017, is expected to be $47,600. The company wants to maintain a minimum cash balance of $57,420 Prepare a cash budget for January and February. (Do not leave any answer field blank. Enter 0 for amounts.)Explanation / Answer
Solution:
BRAMBLE CORP.
Cash Budget
For the Two Months Ending February 28, 2017
January
February
Beginning Cash Balance
$47,600
$60,600
Add: Cash Receipts
Sale of Securities
$0
$5,100
Collections from customers
$329,800
$379,000
Notes receivable
$18,700
$0
Total receipts
$348,500
$384,100
Total Available Cash
$396,100
$444,700
Less: Cash Disbursements
Salaries
$84,800
$81,000
Selling Expenses
$78,700
$87,600
Administrative Expenses (Note 1)
$70,100
$72,600
Purchases
$101,900
$140,000
Dividends
$0
$13,000
Total Cash Disbursements
$335,500
$394,200
Excess (deficiency) of available cash over disbursements
$60,600
$50,500
Financing:
Borrowings
$6,920
Repayments
Ending Cash Balance
$60,600
$57,420
Note 1 ---- Depreciation is a non cash item and does not involve any cash flow. Hence, cash administrative expenses are excluding the depreciation. That is the reason it is taken excluding depreciation.
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BRAMBLE CORP.
Cash Budget
For the Two Months Ending February 28, 2017
January
February
Beginning Cash Balance
$47,600
$60,600
Add: Cash Receipts
Sale of Securities
$0
$5,100
Collections from customers
$329,800
$379,000
Notes receivable
$18,700
$0
Total receipts
$348,500
$384,100
Total Available Cash
$396,100
$444,700
Less: Cash Disbursements
Salaries
$84,800
$81,000
Selling Expenses
$78,700
$87,600
Administrative Expenses (Note 1)
$70,100
$72,600
Purchases
$101,900
$140,000
Dividends
$0
$13,000
Total Cash Disbursements
$335,500
$394,200
Excess (deficiency) of available cash over disbursements
$60,600
$50,500
Financing:
Borrowings
$6,920
Repayments
Ending Cash Balance
$60,600
$57,420