Question
In: Accounting
6. The O’Brien Vineyards makes and sells an awarding Pinot Noir. Each bottle of Pinot Noir...
6. The O’Brien Vineyards makes and sells an awarding Pinot Noir.
Each bottle of Pinot Noir sells for $24 and has a unit variable
cost of $14.
Here is what you will need to put together my Cash Budget
Maintains a 12% (1% per month) open line of credit for
$75,000
Maintains a minimum cash balance of $20,000
Borrows on the first day of the month and repays loans last day
of the next month (for example, if you were to borrow for July,
which is really to meet August 1 beginning balance, you would repay
end of Sept. You have use of the funds for 2 full months).
Pays a cash dividend of $10,000 in July
Purchased $38,000 of oak barrels in August and $48,400 of oak
barrels in September both purchases of equipment paid for in
cash.
Cash balance at July 1 is $22,500
I have summarized the following budget information for you
July
August
September
Cash Collections
70,000
88,000
129,650
Cash Disbursements:
Materials
18,000
19,500
17,700
Direct Labor
8,000
9,200
8,500
MOH
24,000
27,000
25,000
Selling and Admin
18,000
19,300
18,850
Prepare the Cash Budget
July
August
September
Beginning Cash
add:
Cash Collections
Total Cash Available
less:
Cash Disbursements
Materials
Direct Labor
MOH
Selling and Admin
Equipment Purchase
Dividend
Total Disbursements
Excess (Deficiency)
Financing:
Borrowing
Repayments
Interest
Total Financing
Ending Cash Balance
Solutions
Expert Solution
Solution:
| Cash Budget - O' Brien Vineyards | |||
| Particulars | July | August | September |
| Opening Cash balance | $22,500.00 | $20,000.00 | $20,000.00 |
| Add: Collection from customers | $70,000.00 | $88,000.00 | $129,650.00 |
| Total Cash Available | $92,500.00 | $108,000.00 | $149,650.00 |
| Less - Cash Disbursement: | |||
| Materials | $18,000.00 | $19,500.00 | $17,700.00 |
| Direct labor | $8,000.00 | $9,200.00 | $8,500.00 |
| MOH | $24,000.00 | $27,000.00 | $25,000.00 |
| Selling and admin | $18,000.00 | $19,300.00 | $18,850.00 |
| Equipment Purchase | $0.00 | $38,000.00 | $48,400.00 |
| Dividend | $10,000.00 | $0.00 | $0.00 |
| Total Cash disbursement | $78,000.00 | $113,000.00 | $118,450.00 |
| Excess (deficiency) of cash available over disbursements | $14,500.00 | -$5,000.00 | $31,200.00 |
| Financing: | |||
| Borrowings | $5,500.00 | $25,000.00 | $0.00 |
| Repayments | $0.00 | $0.00 | -$5,500.00 |
| Interest | $0.00 | $0.00 | -$110.00 |
| Total Financing | $5,500.00 | $25,000.00 | -$5,610.00 |
| Ending cash balance | $20,000.00 | $20,000.00 | $25,590.00 |
ekkarill92 answered 1 year agoRelated Solutions
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years of operations:
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Direct materials
$28
Direct labor
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Variable manufacturing overhead
$4
Variable selling and administrative
$3
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Fixed manufacturing overhead
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Fixed selling and administrative expenses
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Direct labor
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Variable manufacturing overhead
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Variable selling and administrative
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Fixed selling and administrative expenses
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Direct materials
$
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Direct labor
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Variable manufacturing overhead
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Direct labor
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