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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 creditCollections 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, Ianuary 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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