Question

The St Germaine Company is preparing its cash payments budget. The following items relate to cash payments the company anticipates making during the second quarter of the upcoming year. (Click the icon to view the cash payment information.) Requirement Prepare a cash payments budget for April, May, and June and for the quarter. a box is not used in the table leave the box empty, do not enter a zero.) Х More Info The St. Germaine Company Cash Payments Budget For the Months of April through June May Cash payments for direct materials: 55% of current month purchases 45% of last month's purchases April June Quarter a. The company pays for 55% of its direct materials purchases in the month of purchase and the remainder the following month. The company's direct material purchases for March through June are anticipated to be as follows: March April May June $ 116,000 $ 132,000 $ 126,000 $ 147,000 b. Direct labor is paid in the month in which it is incurred. Direct labor for each month of the second quarter is budgeted as follows: April May June $ 60,000 $ 70.000 $ 85,000 c. Manufacturing overhead is estimated to be 160% of direct labor cost each month. This monthly estimate includes $32,000 of depreciation on the plant and equipment. All manufacturing overhead (excluding depreciation) is paid in the month in which it is incurred. d. Monthly operating expenses for March through June are projected to be as follows: March April May June 77,000 $ 83.000 $ 89,000 $ 92,000 Monthly operating expenses are paid in the month after they are incurred. Monthly operating expenses include $15,000 for monthly depreciation on administrative offices and equipment, and $3,000 for bad debt expense. e. The company plans to pay $8,000 (cash) for a new server in May. f. The company must make an estimated tax payment of $14,000 on June 15. EA Print Done Enter any number in the edit fields and then click Check Answer

Answer 1

Answer:

The St. Germaine Company
Cash Payments Budget
For the Months of April through June
	April	May	June	Quarter
Cash payments for direct materials:
55% of current month purchases	$      72,600	$      69,300	$      80,850	$      2,22,750
45% of last month's purchases	$      52,200	$      59,400	$      56,700	$      1,68,300
Cash payments for direct labors:	$      60,000	$      70,000	$      85,000	$      2,15,000
Total	$   1,84,800	$   1,98,700	$   2,22,550	$      6,06,050

Working note:

	Direct materials purchase	Payment in April	Payment in April	Payment in May	Payment in May	Payment in June	Payment in June
Month		%	$	%	$	%	$
	(i)	(ii)	(iii)[(i)*(ii)]	(iv)	(v)[(i)*(iv)]	(vi)	(vii)[(i)*(vi)]
March	$   1,16,000	45%	$      52,200		$                 -		$                  -
April	$   1,32,000	55%	$      72,600	45%	$        59,400		$                  -
May	$   1,26,000		$               -	55%	$        69,300	45%	$         56,700
June	$   1,47,000		$               -		$                 -	55%	$         80,850
TOTAL	$   4,05,000		$   1,24,800		$     1,28,700		$     1,37,550

Payment criteria:

55% in same month & 45% in next month of direct material purchases.

Direct labor is paid in the month which it is incurred.