Question

11. Yeaman has $15,000 in cash on hand on January 1 and has collected the following budget data: 1(Click on the icon to view the budget data.) Assume direct labor costs and manufacturing overhead costs are paid in the month incurred. Additionally, assume Yeaman has cash payments for selling and administrative expenses including salaries of $40,000 per month plus commissions that are 3% of sales, all paid in the month of sale. The company requires a minimum cash balance of $1,000. Prepare a cash budget for January and February. Round to the nearest dollar. Will Yeaman need to borrow cash by the end of February? Begin by preparing the cash budget for January, then prepare the cash budget for February. (Complete all input boxes. Enter a "0" for any zero balances. Round all amounts entered into the cash budget to the nearest whole dollar.) Yeaman Company Cash Budget Two Months Ended January 31 and February 28 January February 15,000 Beginning cash balance 442,300 Cash receipts 457,300 Cash available Cash payments: Purchas of 179,848 rect materials 135,010 Direct labor 53,828 Manufacturing overhead Selling and administrative expenses Total cash payments Ending cash balance before fionancing Minimum cash balance desired Projected cash excess (defiDciency) Financing: 0 Borrowing Principal repayments Total effects of Ofinancing Ending cash balance Will Yeaman need to borrow cash by the end of February? Yeaman (1) need to borrow cash by the end of February because the ending cash balance before financing is (2) than the minimum cash balance required. 1: Data Table "2019 February January 566,000 532,000 $ $ Sales 502,600 442,300 Cash receipts from customers 160,412 179,848 Cash payments for direct materials purchases 112,626 135,010 Direct labor costs Manufacturing overhead costs (includes depreciation 53,922 55,628 of $1,800 per month) (2) O greater O less (1) Owill Owill not

Answer 1

Yeaman Feb. JAN. Cash budget Opening balance Cash receipts Total Cash available Less:- cash disbursements 15000 32654 442300 502600 457300 535254 Purchases 179848 160412 Direct labor Mfg. OH (55628-1800 Selling and adm. Exp.(40000 Total Disbursements 112626 135010 52122 (53922-1800) 53828 56980 (40000 [566000 3 %1) [532000 55960 3%1) 424646 382140 Ending cash balance before finanacing Minimum cash balance desired Excess (deficiency) Financing: Borrowing Principal repAyments Total effects of financing Ending balance 153114 32654 1000 1000 32654 153114 32654 153114 1) will not 2) greater