Question
1.Nunez Company expects to have a cash balance of $45,000 on January 1, 2019. Relevant monthly budget data for the first two months of 2019
1.Nunez Company expects to have a cash balance of $45,000 on January 1, 2019. Relevant monthly budget data for the first two months of 2019 are as follows:
Collections from customers: January $100,000, February $160,000
Payments to suppliers: January $60,000, February $80,000
Direct labour: January $30,000, February $45,000. Wages are paid in the month they are incurred
Manufacturing overhead: January $26,000, February $31,000. These costs include depreciation of $1,000 per month. All other overhead costs are paid as incurred.
Selling and administrative expenses: January $15,000, February $20,000. These costs are paid as incurred
Sales of marketable securities in January are expected to realize $10,000 in cash
Nunez Company has a line of credit at a local bank. It can borrow up to $25,000. The company wants to keep a minimum monthly cash balance of $25,000.
Prepare a cash budget for January and February
| January | February | 2 months |
Beginning cash balance | |||
Add: | |||
Add: | |||
Total cash available | |||
Less: cash disbursements | 131,000 | 176,000 | 307,000 |
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Total cash disbursements |
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Excess (deficiency) of collections over disbursements |
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Financing: |
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Borrowing |
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Repayments |
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Total financing |
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Ending Cash balance |
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