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:

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 $$9,000$ 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 $$53,000,$ marketable securities of $$75,000,$ and accounts receivable of $$155,300($ $$33,300$ from July

sales and $$122,000$ from August sales$).$ Sales on account for July and August were $$111,000$ and $$122,000,$ respectively. Current liabilities as of

September $1$ include $$9,000$ 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 $$20,000$ will be made in October. Bridgeport's regular quarterly dividend of $$9,000$ is

expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $$52,000.$

Required:

Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume $360$ days per year for interest

calculations.calculations.

Bridgeport Housewares Inc.

Cash Budget

For the Three Months Ending November $30$

Less estimated cash payments for:

Total cash payments

Cash balance at end of month

October

$