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. a. Beginning cash balance, September 1, $42,000. b. Budgeted cash receipts from sales in September, $255,000. c. Raw materials are purchased on account. Purchase amounts are August (actual), $77,000, and September (budgeted) $107,000. Payments for direct materials are made as follows: 65% in the month of purchase and 35% in the month following purchase. d. Budgeted cash payments for direct labor in September, $30,000. e. Budgeted depreciation expense for September, $3,500. f. Other cash expenses budgeted for September, $57,000. g. Accrued income taxes payable in September, $10,200. h. Bank loan interest payable in September, $1,700.

Answer 1

1) Cash budget

Beginning Cash balance		42000
Cash collection from customer		255000
Total cash available		297000
Cash payment for
Direct material	96500
Direct labor	30000
Other expense	57000
Accrued taxes	10200
Interest on Bank loan	1700
Total cash payment		195400
Ending Cash balance		101600

2) Budgeted direct labor cost

	Budgeted hour	Budgeted rate per hour	Budgeted cost
Data entry	1160	10	11600
Auditing	2330	42	97860
Tax	2100	60	126000
Consulting	370	60	22200
Total	5960		257660