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3. GBC Ltd. prepares a monthly cash budget. Here is income statement data for the next two months, Dec 2021 and Jan 2022: December, 2021
3. GBC Ltd. prepares a monthly cash budget. Here is income statement data for the next two months, Dec 2021 and Jan 2022: December, 2021 January, 2022 Sales $380,000 $400.000 Direct Materials Purchases 120.000 110,000 Direct Labour 85,000 105,000 Manufacturing Costs* 62,000 77,000 Selling and Admin Exp. 75,000 80.000 *Includes $5,000 Depreciation Expense in EACH month. All sales are on credit. Collections of sales are estimated to be 60 in the month of sale. 30% in the month following the sale, and the leftover balance in the second month following the sale. Direct material purchases are paid as follows: 30% in the month of sale, and the balance in the month after the sale. All other costs requiring payment are paid in the month of sale. Sales in October, 2021: $200,000; for November, 2021: $280,000. Direct materials purchases in November, 2021. $90,000. Other incoming cash: December 2021, interest receivable, $3,000, January, 2022. proceeds from sale of securities, $5,000. Other outgoing cash: February 2022, payment of cash for land, $20,000. Cash balance is expected to be $50,000 as of December 1, 2021. The company's policy is to always start each month with at least $30.000 in cash. REQUIRED: prepare a cash budget for GBC for December 2021 and January 2022. Use the schedule below. (12 marks) GBC Cash Budget Dec 2021 and Jan 2022 Dec 2021 Jan 2022 Opening balance $ 50,000 Cash from Oct 21 sales Cash from Nov/21 sales Cash from Dec 21 sales Cash from Jan 22 Sales Materials purchases from Nov/21 Materials purchases from Dec/21 Materials purchases from Jan 22 Materials purchases from Feb/22 Direct Labour Manufacturing Costs Selling and admin costs Other Inflows Other outflows Financing (if needed) Closing Balance
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