Exercise 5-27 Sheridan, Inc. prepared the following cash budget for the fourth q

Question

Exercise 5-27 Sheridan, Inc. prepared the following cash budget for the fourth quarter. Fill in the missing amounts, assuming that Sheridan desires to maintain a $15,000 minimum monthly cash balance and all equipment was purchased during December. Any required borrowings and repayments must be made in even increments of $1,000. (Enter answers in necessary fields only. Leave other fields blank. Do not enter 0.) October November December Quarter Beginning cash balance $15,620 $16,110 Collections from sales 56,800 243,270 Total cash available 72,910 98,480 126,450 Less disbursements Materials purchases Direct labor Manufacturing overhead Selling & administrative expenses Equipment purchase Dividends 9,550 5,540 21,840 29,620 14,350 8,090 21,840 36,340 5,140 19,820 28,890 18,770 14,860 4,780 4,780 Total disbursements 66,290

Explanation / Answer

october November December Quarter Beginning cash balance 16,110 15,620 22,840 16,110 collections from sales 56,800 82,860 103,610 243,270 total cash available 72,910 98,480 126,450 259,380 less disbursements material purchases 12,440 9,550 14,350 36,340 direct labor 5,140 5,540 8,090 18,770 manufacturing overhead 19,820 21,840 21,840 63,500 selling & administrative expenses 28,890 29,620 31,330 89,840 Equipment purchases 14,860 14,860 Dividends 4,780 4,780 total disbursements 66,290 66,550 95,250 228,090 excess(Deficiency)of cash 6,620 31,930 31,200 31,290 Minimum cash balance 15,000 15,000 15,000 15,000 Cash available (needed) -8,380 16,930 16,200 16,290 Financing: Borrowings 9,000 9,000 Repayments -9,000 -9000 interest -90 -90 total financing 9,000 -9090 -90 ending cash balance 15,620 22,840 16,200 16,200

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