Question

Use the following information to prepare the September cash budget for PTO Manufacturing Co. The following information relates to expected cash receipts and cash payments for the month ended September 30.

1. Beginning cash balance, September 1, $40,000.
2. Budgeted cash receipts from sales in September, $255,000.
3. Raw materials are purchased on account. Purchase amounts are: August (actual), $80,000; and September (budgeted), $110,000. Payments for direct materials are made as follows: 65% in the month of purchase and 35% in the month following purchase.
4. Budgeted cash payments for direct labor in September, $40,000.
5. Budgeted depreciation expense for September, $4,000.
6. Other cash expenses budgeted for September, $60,000.
7. Accrued income taxes payable in September, $10,000.
8. Bank loan interest payable in September, $1,000.

PTO MANUFACTURING COMPANY Cash Budget For Month Ended September 30 Beginning cash balance Cash receipts from sales Total cash available Cash payments for: Direct materials 0 Direct labor Other expenses Accrued taxes Interest on bank loan Total cash payments Ending cash balance 0 0

Answer 1

PTO MANUFACTURING COMPANY CASH BUDGET FOR MONTH ENDED SEPTEMBER30
Beginning cash balance		40000
cash receipt from sales		255000
Total cash available		295000
cash payment for
Direct material	99500
Direct labor	40000
other expense	60000
Accrued taxes	0
Interest on bank loan	0
Total cash payments		(199500)
Ending cash balance		95500

**Payment for raw material purchase :[110000*.65]+[80000*.35]

                                = 71500 +28000

                                = 99500

**Depreciation is a non cash expense

**Accrued taxes and Interest on bank loan are not yet paid and payable at end of September 30