Question

Cash Budget The reconds of x corporation shows the following infoematice concerning the sub for the c 13 13 Cash collection (IN 7.200,100 00.500 73,009 55,000 wages (ou Required Rm in 56,000 R n 725,000 RAw An 12.000 713.090 cost (out 1-Estimated beginning cash balance for the coming period 2013s $ 312.00 2-Factory machine depreciation was estimated to be 15,000 5 per quarter,factory insurance is $4,000y month, salaries of production supervisors $56,000/month, factory rent $24,000 per 4 months, display rent $30,000 per half year, selling equipment depreciation $14000V 2 months, display insurance $8000/month administration equipment depreciation 30,000/ 2months 3-Aland lot costing 200.000 wil be sold. SO% wil be colected nQ1/13, 40% wll be collected next quarter and the rest in the quarter after. 4A production ine costing 520,000 will be added, 200,000 will be pain Q2/13, 20% wd be nav13 and the rest in the quarter ater 5-A cash distribution of 1% of sales revenue will be pad to engloyees on each quarter 6-An extra cash distribution will paid to employees amonted 2% of the total cash collection when it exceeds $ 7,000,000 7- Used machines amounted to $132,000 will be sold in Q2/13 used automobile amounted $128,000 will be sold in 04/13 8-A warehouse extension will be made within the coming period costing 3438,000 218,000 will be paid in Q1/13, $73,000 will be paid in Q2/13 and the rest in the quarter Required: Prepare the cash budget for the coning period 2013

Answer 1

	Cash Budget for 2013
	Particulars	Q1 / 2013 ($)	Q2 / 2013 ($)	Q3 / 2013 ($)	Q4 / 2013 ($)
A	Opening Cash Balance	312400	4238490	6480885	9504668
B	Add: Cash collections
	a. From sales	7200100	6500400	7200800	6100500
	b. From sale of used machine	0	132000	0	0
	c. From sale of used automobile	0	0	0	128000
	d. Cash realized from sale of land	100000	80000	20000
		($200000 * 50%)	($200000 * 40%)	($200000 * 10%)
	sub-total (B)	7300100	6712400	7220800	6228500
C	Total (A +B )	7612500	10950890	13701685	15733168
D	Less: Cash disbursements
	a. Direct wages (given)	325000	465000	326000	485000
	b. Purchase of raw material (given)	425000	328000	456000	520000
	c. Marketing and administration cost	320000	420000	560000	480000
	d. Factory insurance	12000	12000	12000	12000
		($4000 * 3)	($4000 * 3)	($4000 * 3)	($4000 * 3)
	e. Salaries of production supervisor	1668000	1668000	1668000	1668000
		($556000 * 3)	($556000 * 3)	($556000 * 3)	($556000 * 3)
	f. Factory rent		524000	524000	524000
	g. Display rent		530000		530000
	h. Display insurance	174000	174000	174000	174000
		($58000 * 3)	($58000 * 3)	($58000 * 3)	($58000 * 3)
	i. Cash paid for purchase of production line		200000	104000	216000
				($520000 * 20%)	($520000-$200000-$104000)
	j. Cash distribution to employees	88008	76005	82001	67004
	(1% of the sales revenue)	($8800800 * 1%)	($7600500 * 1%)	($8200100 * 1%)	($6700400 * 1%)
	k. Extra cash distribution to employees	144002		144016
	(2% of total cash collection when it exceeds $7000000)	($7200100 * 2%)		($7200800 * 2%)
	l. Cash payment for warehouse extension (given)	218000	73000	147000
				($438000 - $218000 - $73000)
	sub-total (D)	3374010	4470005	4197017	4676004
E	Closing Cash Balance ( C - D )	4238490	6480885	9504668	11057164

NOTE: Factory machine depreciation, selling equipment depreciation and administration equipment depreciation is not to be considered in cash budget, since it is an non-cash expenditure.