Question

***Oure: 0.81%, 2.23 of Assume the following data for Animal Transport Company Click the icon to view the assumptions) Click the icon to view budget Wormation) Requirements 1 Prepare a cash budget for Art for Animal Transport 2. Why do Animal Transports managers prepares con budget in addition to the revenue, expertes, and operating income budowl? Requirement 1. Prepare a cash budget for April for Animal Transport Begin the cash budget by cutouting the cash valle, then tot dubursements, and tray the facts of trancing and the ending can botance. Round your own the nearest who starter oyment of contences com does not exceed $10,000 at the end of Art) Cash Budget April 34 Cash balance, beginning 5000 Cash sales Credit card sales Total cash available for needs

Answer 1

Answer- 1:

Cash Budget April 30
	$
Opening Cash balance	5,400
Cash sales (166,100*10%)	16,610
Credit card sales (166,100-16,610)*97%	145,005
	167,015
Less: Disbursement
Direct Manufacturing Labor	39,200
Direct Material (8,700+13430*50%)	15,415
Manufacturing overhead (69,580-24,500)	45,080
Non Manufacturing overhead- Salaries	18,200
Non Manufacturing overhead- Other fixed cost (16,000-10,500)	5,500
Non Manufacturing overhead- Sales commissions	1,661
Machinery purchase	13,300
Income Tax	5,000
Total Cash Disbursements	143,356
Excess (Defficiency) of cash available over disbursement	23,659
Financing (if needed)
Repayment of loan	2,600
Interest on Loan (2,600*12%*1/12)	26
Total Financing	2,626
Closing Cash Balance	21,033

Answer- 2:

Cash budget is prepared to know what budgeted cash would be used to pay and what cash inflows would be there during the period. It helps to know that there would be budgeted cash excess or deficit and accordingly we can make arrangements. If there is excess than it could be applied for various activities and if deficit it needs to be borrowed.

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