Question

Nadia Company expects to have a cash balance of $45,100 on January 1, 2020. Nadia has budgeted the following for the first two months of the year 2020 Collections from customers: January $90,500; February $109,800. 1. Payments to suppliers: January $40,100; February $50,500. 2. Direct labour: January $29,800; February $34,900. Wages are paid in the month they are incurred 3. 4 Manufacturing overhead: January $24,900; February $30,100. Overhead costs are paid as incurred. Selling and administrative expenses: January $15,800; February $22,20o. These costs do not include depreciation and they are paid as incurred. 5. Sales of investments in January are expected to realize $10,000 in cash. Nadia Company wants to keep a minimum monthly cash balance of $20,000. 6.

Answer 1

Cash Budget
	January	February
Beginning Cash Balance	$         45,100.00	$    35,000.00
Add: Collections from customer	$         90,500.00	$ 109,800.00
Sales of Invesrments	$         10,000.00
Total Cash Available	$       145,600.00	$ 144,800.00
Less: Cash Disbursments
Payment to suppliers for inventory	$         40,100.00	$    50,500.00
Direct Labor	$         29,800.00	$    34,900.00
Manufacturing Overhead	$         24,900.00	$    30,100.00
Selling and Administrative Expenses	$         15,800.00	$    22,200.00
Total cash disbursements	$       110,600.00	$ 137,700.00
Excess (deficiency) of cash available over disbursements	$         35,000.00	$      7,100.00
Financing:
Borrowings		$    12,900.00
Repayments
Interests
Total Financing	$                        -	$    12,900.00
Ending Cash Balance	$         35,000.00	$    20,000.00