Question
Atlas is a manufacturer of sketching pads. The following information is available from the companys budgets: Cash Receipts Selling & Administrative Expenses Manufacturing Overhead Direct
Atlas is a manufacturer of sketching pads. The following information is available from the companys budgets:
| Cash Receipts | Selling & Administrative Expenses | Manufacturing Overhead | Direct Labor | Direct Materials Purchases | |||||||||||||||
| April | $ | 240,000 | $ | 92,000 | $ | 50,400 | $ | 43,200 | $ | 74,400 | |||||||||
| May | $ | 255,000 | $ | 82,000 | $ | 52,800 | $ | 45,900 | $ | 79,050 | |||||||||
| June | $ | 275,000 | $ | 77,000 | $ | 56,000 | $ | 49,500 | $ | 85,250 | |||||||||
Manufacturing overhead includes depreciation of $12,000 per month (this a non-cash expense). All expenses including material purchases are paid in the month they are incurred. Cash at the beginning of the period (April 1) was $20,000. The company wants to maintain a minimum cash balance of $20,000. There were no loans outstanding on April 1. The line of credit with the bank allows for borrowings and repayments in $1,000 increments. If the loan is paid off by the end of the quarter, there is no interest. a. Prepare monthly cash budgets for the 2nd quarter. (Deductible values and negative values should be indicated with minus sign.)
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b. What is the amount of cash shown on the balance sheet at the end of the quarter?
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Financial Accounting Objective Questions And Explanations
Authors: Irvin N. Gleim
7th Edition
0917539664, 978-0917539664
