Question

Use the following information to prepare the September cash budget for PTO Co. The following information relates to expected cash receipts and cash payments for the month ended September 30. Beginning cash balance, September 1, $42,000. Budgeted cash receipts from sales in September, $263,000. Raw materials are purchased on account. Purchase amounts are August (actual), $70,000, and September (budgeted), $103,000. Payments for direct materials are made as follows: 65% in the month of purchase and 35% in the month following purchase. Budgeted cash payments for direct labor in September, $36,000. Budgeted depreciation expense for September, $3,300. Other cash expenses budgeted for September, $54,000. Accrued income taxes payable in September, $10,800. Bank loan interest payable in September, $1,500.

Answer 1

PTO Co. Cash Budget For The Month of September
	September
Beginning cash balance	$42,000
Add: Receipts
Cash receipts	263,000
Total receipts	305,000
Less: Payments
Purchases of direct material(70,000*35%+103,000*65%)	91,450
Direct labor	36,000
Other expenses	54,000
Income tax	10,800
Bank loan interest	1,500
Total payments	193,750
Ending cash balance (305,000-193,750)	$111,250