In: Accounting
PART C
Roan’s manufacturing is preparing its cash budget for the first two months of the upcoming year. The following information concerns the company’s upcoming cash receipts and disbursements.
Required:
a.
Cash Collections budget | |||
January | February | Total | |
Cash Sales | $ 39,000 | $ 44,850 | $ 83,850 |
Collection on credit sales | $ 18,795 | $ 21,945 | $ 40,740 |
Total Cash Collections | $ 57,795 | $ 66,795 | $ 124,590 |
b.
Cash Payment for Material Purchase Budget | |||
January | February | Total | |
30% of current month DM Purchases | $ 7,050 | $ 8,400 | $ 15,450 |
70% of last month DM Purchases | $ 17,850 | $ 16,450 | $ 34,300 |
Total Cash Payments | $ 24,900 | $ 24,850 | $ 49,750 |
c.
Cash Payment for Operating Expenses Budget | |||
January | February | Total | |
Variable Cash operating Expenses | |||
Sales Commission December | $ 2,040 | $ 2,040 | |
Sales Commission January | $ 2,400 | $ 2,400 | $ 4,800 |
Sales Commission February | $ 2,760 | $ 2,760 | |
Total Variable Cash operating Expenses | $ 4,440 | $ 5,160 | $ 9,600 |
Fixed Cash operating Expenses | |||
Sales Salaries December | $ 4,000 | $ 4,000 | |
Sales Salaries January | $ 4,500 | $ 4,500 | $ 9,000 |
Sales Salaries February | $ 5,250 | $ 5,250 | |
Rent Expense | $ 3,300 | $ 3,300 | $ 6,600 |
Total Fixed Cash operating Expenses | $ 11,800 | $ 13,050 | $ 24,850 |
Total Cash Payment for Operating Expenses | $ 16,240 | $ 18,210 | $ 34,450 |
d.
Cash Bugdet | |||
January | February | Total | |
Beginning Cash Balance | $ 18,000 | $ 34,655 | $ 18,000 |
Plus Cash Collections from customers | $ 57,795 | $ 66,795 | $ 124,590 |
Total Cash Available | $ 75,795 | $ 101,450 | $ 142,590 |
Less Cash Payments | |||
Direct Material Purchases | $ 24,900 | $ 24,850 | $ 49,750 |
Operating Expenses | $ 16,240 | $ 18,210 | $ 34,450 |
Total Cash Payment | $ 41,140 | $ 43,060 | $ 84,200 |
Ending Cash Balance | $ 34,655 | $ 58,390 | $ 58,390 |
Cash Collections budget | ||
January | February | |
Cash Sales | =60000*65% | =69000*65% |
Collection on credit sales | =60000*35%*30%+51000*35%*70% | =69000*35%*30%+60000*35%*70% |
Cash Payment for Material Purchase Budget | ||
January | February | |
30% of current month DM Purchases | =23500*30% | =28000*30% |
70% of last month DM Purchases | =25500*70% | =23500*70% |
Cash Payment for Operating Expenses Budget | ||
January | February | |
Variable Cash operating Expenses | ||
Sales Commission December | =51000*8%*50% | |
Sales Commission January | =60000*8%*50% | =60000*8%*50% |
Sales Commission February | =69000*8%*50% | |
Total Variable Cash operating Expenses | ||
Fixed Cash operating Expenses | ||
Sales Salaries December | =8000*50% | |
Sales Salaries January | =9000*50% | =9000*50% |
Sales Salaries February | =10500*50% | |
Rent Expense | 3300 | 3300 |