CHECK FIGURES: Jan Excess (deficiency), $49000; Feb end cash, $50465 ck figues:
ID: 2541987 • Letter: C
Question
CHECK FIGURES: Jan Excess (deficiency), $49000; Feb end cash, $50465
ck figues: Budgeted May purchases, $515,000; Budgeted May cash payments, $503,750; Budgeted April cash disbursements, $1010,750;Ending cash balance June, $170,830
1. Dinkle Inc, prepares monthly cash budgets, The expected cash balance on 1/1 is S60,000.Relevant data for the first two months are given below: February $400,000 130,000 100,000 175,000 86,000 December January Sales Direct material purchases Direct labor Manufacturing overhead Selling and administrative expenses $320,000 350,000 110,000 90,000 170,000 79,000 100,000 All sales are on account. Collections are expected to be 40% in the month of sale and 60% in the month following sale. 30% of purchases are paid in the month of purchase and the balance due is paid in the following month. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,000 of depreciation per month. Interest is 6% per year and is paid monthly on the unpaid balance. Borrowing and repayments occur at the end of the month. Dinkle desires a minimum cash balance of $50,000. Prepare a cash budget for January and February. Include separate schedules for cash collections and cash payments for materials. (ck figures: Budgeted cash balance January, $50,000)Explanation / Answer
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(a) Sales Budget January February Total Budgeted Sales 350000 400000 750000 (b) Schedule of cash collections: January February Total December Sales 192000 192000 January Sales 140000 210000 350000 March Sales 160000 160000 Total Collections 332000 370000 702000 (c) cash payment budget for purchases January February Total Budgeted Purchases 110000 130000 240000 December Purchases 70000 70000 January Purchases 33000 77000 110000 February Purchases 39000 39000 Total cash payments for purchases 103000 116000 219000 Cash Budget October November Total Beginning Balance 60000 50000 60000 Add: Cash receipts 332000 370000 702000 Cash available for disbursements 392000 420000 762000 Less: Payments Raw material purchases 103000 116000 219000 Direct labor 90000 100000 190000 Manufacturing overhead 170000 175000 345000 Selling and administrative Expenses 78000 85000 163000 Interest 4950 4950 Total payments 441000 480950 917000 Receipts minus payments -49000 -60950 -155000 Minimum cash balance 50000 50000 12000 Excess / (Shortage) -99000 -110950 -167000 Financing activitiy Borrowing / (Repayments) * 99000 111000 210000 Interest 0 0 0 99000 111000 210000 Ending cash balance 50000 50050 55000