Question

Exercise 7-14 Blossom Company expects to have a cash balance of $57,600 on January 1, 2017. These are the relevant monthly budget data for the first two months of 2017 1. Collections from customers: January $82,600, February $157,600 2. Payments to suppliers: January $51,600, February $86,600. 3. Wages: January $31,580, February $41,580. Wages are paid in the month they are incurred 4. Administrative expenses: January $22,580, February $25,580. These costs include depreciation of $1,000 per month. All other costs are paid as incurred 5. Selling expenses: January $16,580, February $21,580. These costs are exclusive of depreciation. They are paid as incurred 6. Sales of short-term investments in January are expected to realize $13,580 in cash.Blossom Company has a line of credit at a local bank that enables it to borrow up to $25,0 The company wants to maintain a minimum monthly cash balance of $31,600 Prepare a cash budget for January and February BLOSSON COMPANY Cash Budget January 442 PM

Answer 1

Ans- BLOSSOM COMPANY

Cash Budget

For two months of January and February, 2017

Particulars	January	February
Beginning Cash Balance (A)	$57,600	$32,440
Add: Cash Receipts:-
Collection from customers	$82,600	$157,600
Sale of short-term investments	$13,580
Total Receipts (B)	$96,180	$157,600
Total Cash Available (A+B)	$153,780	$190,040
Less: Cash Disbursements:-
Payment to suppliers	$51,600	$86,600
Wages	$31,580	$41,580
Administrative expenses	$21,580	$24,580
Selling expenses	$16,580	$21,580
Total Disbursements (C)	$121,340	$174,340
Excess (Deficiency) of available cash over disbursements (A+B)-(C)	$32,440	$15,700
Financing:-
Borrowings		$15,900 ($31,600-$15,700)
Repayments
Ending Balance	$32,440	$31,600

Kindly give thumbsup if u like my answer...Thanks!!!