Sentinel Corporation is preparing its cash payments budget for next month. The following information pertains to the cash payments:
a. Sentinel Corporation pays for 50% of its direct materials purchases in the month of purchase and the remainder the following month. The current month’s direct material purchases were $70,000, while Sentinel Corporation anticipates $80,000 of direct material purchases next month.
b. Direct labour for the upcoming month is budgeted to be $32,000 and will be paid at the end of the upcoming month.
c. Manufacturing overhead is estimated to be 150% of direct labour cost each month and is paid in the month in which it is incurred. This monthly estimate includes $11,000 of depreciation on the plant and equipment.
d. Monthly operating expenses for next month are expected to be $43,000, which includes $2,000 of depreciation on office equipment and $1,000 of bad debt expense. These monthly operating expenses are paid during the month in which they are incurred.
e. Sentinel Corporation will make an estimated tax payment of $7,000 next month.
How much cash will be paid out next month?