Prepare a Cash Budget. Alpha Corporation is projecting a cash balance of $40,000
ID: 2589736 • Letter: P
Question
Prepare a Cash Budget.
Alpha Corporation is projecting a cash balance of $40,000 in its December 31, 2009, balance sheet. Alpha's schedule of expectedc expected payments for direct materials for the first quarter of 2010 shows total payments of $50,000. Other information gathered for the first quarter of 2010 is: sale of equipment $8,000; direct labor $70,000, manufacturing overhead $30,000, selling and administrative expenses $50,000; and purchase of securities $15,000. Alpha wants to maintain a balance of at least $45,000 cash at the end of each quarter. Prepare a Cash BudgetExplanation / Answer
Cash Budget of alpha corporation on December 31,2009
Beginning cash balance
$40,000
Add: Receipts
Sale of equipment
$8,000
Collection from customers
$200,000
Total receipts
$208,000
Total available cash
$248,000
Less: Disbursements
Direct material
$50,000
Direct labour
$70,000
Manufacturing overhead
$30,000
selling and administration expenses
$50,000
purchase of securities
$15,000
total Disbursements
$215,000
Excess of available cash over cash disbursements
$33,000
Add: Borrowings
$12,000
Ending cash balance
$45,000
Beginning cash balance
$40,000
Add: Receipts
Sale of equipment
$8,000
Collection from customers
$200,000
Total receipts
$208,000
Total available cash
$248,000
Less: Disbursements
Direct material
$50,000
Direct labour
$70,000
Manufacturing overhead
$30,000
selling and administration expenses
$50,000
purchase of securities
$15,000
total Disbursements
$215,000
Excess of available cash over cash disbursements
$33,000
Add: Borrowings
$12,000
Ending cash balance
$45,000