123

Cash Budget, worth 28 points Janes Maxim Company needs a cash budget for the month of April 2022. The company's controller has provided you with the following information and assumptions The April 1, 2022 cash balance is expected to be $14,000. b All sales are on account Credit sales are collected over a three-month period-50 percent in the month of sale, 38 percent in the month following sale, and 12 percent in the second month following sale. Actual sales for February were $102,000 and for March were $90,000. April's sales are budgeted at $110,000 Marketable securities are expected to be sold for $28,000 during the month of April. d March purchases of direct materils were $22,500. The controller estimates that April purchases of direct matena's will be $44,000. 40 percent of a month's raw materials purchases are paid in the month of purchase with the remaining 60 percent paid in the following month. During April, direct labor costs are estimated to be $20,000, Manufacturing overhead is estimated to be $7,600 in April. Further, the controller estimates that approximately 10 percent of the manufacturing overhead is depreciation on the factory building and equipment. Selling and administrative expenses are budgeted at $21,000 for April. Of this amount, $6,000 is for depreciation. During April, Janes Maxim Company plans to buy a new delivery van costing $26,000. The company will pay cash for the van Janes Maxim Company owes $37,000 in income tax, which must be paid in April. Janes Maxim Company must maintain a minimum cash balance of $10,000. To bolster the cash position as needed an open line of credit is available from the bank. There is no current balance on the credit line. The amount of the credit line is limited to $50,000. (Ignore any interest to be paid on open balances.) instructions Prepare the following: A schedule showing the calculation of cash collections for April (show your work). A schedule showing the calculation of cash payments for raw materials for April (show your work). A cash budget for the month of April. Indicate in the financing section any borrowing that will be necessary during the month, (Remember, your total April cash collected in #1 and your total April cash payments for raw material in #2 belong in the cash budget.) Use the next page if you need more room for your work