Cash Budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: September October November Sales $118,000 $139,000 $195,000 Manufacturing costs 50,000 60,000 70,000 Selling and administrative 41,000 42,000 74,000 expenses Capital expenditures 47,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $6,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of $45,000, marketable securities of $64,000, and accounts receivable of $131,200 ($103,000 from July sales and $28,200 from August sales). Sales on account for July and August were $94,000 and $103,000, respectively. Current liabilities as of September 1 include $6,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $17,000 will be made in October. Bridgeport's regular quarterly dividend of $6,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $44,000. Required: 1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign. Assume 360 days per year for interest calculations. Bridgeport Housewares Inc. Cash Budget For the Three Months Ending November 30 September October Estimated cash receipts from: Cash sales $ 11,800 $ 13,900 November $ 19,500 Collection of accounts receivable 100,300 105,240 125,100 112,100 $ 119,140 $ 144,600 X Total cash receipts Less estimated cash payments for: Manufacturing costs $ $ 62,000 41,200 41,000 52,000 42,000 Selling and administrative expenses 74,000 Capital expenditures 47,000 Other purposes: Income tax 17,000 Dividends 6,000 82,200 $ 111,000 $189,000 Total cash payments Cash increase or decrease) 29,900 8,140 $ 4,440 Plus cash balance at beginning of month 45,000 74,900 83,040 Cash balance at end of month 74,900 83,040 $ 38,640 Less minimum cash balance 44,000 44,000 44,000 Excess or (deficiency) 30,900 $ 39,040 $ 5,360 x