Question

Walter pays all expenses in the month incurred. Manufacturing overhead includes $1,550 for machinery depreciation, but the amount for selling and administrative expenses is exclusive of depreciation. Additionally, Walter also expects to buy a piece of property for $7,700 during March. Walter can borrow in increments of $1,000 and would like to maintain a minimum cash balance of $10,000.

Walter Company has the following information for the month of March: Cash balance, March 1 Collections from customers Paid to suppliers Manufacturing overhead Direct labor Selling and administrative expenses $ 17,370 39,950 23,000 6,800 8,600 4,900 Walter pays all expenses in the month incurred. Manufacturing overhead includes $1,550 for machinery depreciation, but the amount for selling and administrative expenses is exclusive of depreciation. Additionally, Walter also expects to buy a piece of property for $7,700 during March. Walter can borrow in increments of $1,000 and would like to maintain a minimum cash balance of $10,000 Required Prepare Walter's cash budget for the month of March. Beginning Cash Balance Budgeted Cash Receipts Budgeted Cash Payments Preliminary Cash Balance Cash Borrowed Ending cash balance

Answer 1

SOLUTION

Cash budget-

Particulars	Amount ($)	Amount ($)
Beginning cash balance		17,370
Budgeted cash receipts		39,950
Budgeted cash payments:
Paid to suppliers	23,000
Manufacturing overheads (6,800-1,550)	5,250
Direct labor	8,600
Selling and administrative expenses	4,900
Property purchased	7,700	(49,450)
Preliminary cash balance		7,870
Cash borrowed		3,000
Ending cash balance		10,870