Question

Flounder Company expects to have a cash balance of $52,470 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows. Collections from customers: January $99,110, February $174,900. Payments for direct materials: January $58,300, February $87,450. Direct labor: January $34,980, February $52,470. Wages are paid in the month they are incurred. Manufacturing overhead: January $24,486, February $29,150. These costs include depreciation of $1,749 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $17,490, February $23,320. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $13,992 in cash. Flounder Company has a line of credit at a local bank that enables it to borrow up to $29,150. The company wants to maintain a minimum monthly cash balance of $23,320. Prepare a cash budget for January and February. (Do not leave any answer field blank. Enter Ofor amounts.) FLOUNDER COMPANY Cash Budget For the Two Months Ending February 28, 2017 January February Beginning Cash Balance Add : Receipts Collections from Customers Sale of Marketable Securities Total Receipts Total Available Cash Less 4): Disbursements Direct Materials Direct Labor Manufacturing Overhead

Answer 1

Solution

FLOUNDER COMPANY
Cash Budget
For january and February' 2017
	January	February
Beginning cash	$      52,470.00	$     32,065.00
Add: Receipts
Cash Collections	$      99,110.00	$   174,900.00
Sales for marketable securities	$      13,992.00
Total receipts	$    113,102.00	$   174,900.00
Available cash balance	$    165,572.00	$   206,965.00
Less: Cash Disbursements for
Direct material	$      58,300.00	$     87,450.00
Direct Labor	$      34,980.00	$     52,470.00
Manufacturing Overheads	$      22,737.00	$     27,401.00
Selling and Administrative expenses	$      17,490.00	$     23,320.00
Total cash Disbursements	$    133,507.00	$   190,641.00
Excess(deficiency) of availabe cash over disbursenemts	$      32,065.00	$     16,324.00
Financing
Borrowing		$        6,996.00
Repayments	$                     -	$                     -
Ending Cash Balance	$      32,065.00	$     23,320.00