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 $108,000 $131,000 $181,000 45,000 56,000 65,000 38,000 39,000 69,000 43,000 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 $8,000 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. Sales Manufacturing costs Selling and administrative expenses Capital expenditures Current assets as of September 1 include cash of $41,000, marketable securities of $58,000, and accounts receivable of $120,800 ($25,800 from July sales and $95,000 from August sales). Sales on account for July and August were $86,000 and $95,000, respectively. Current liabilities as of September 1 include: $8,000 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 $16,000 will be made in October. Bridgeport's regular quarterly dividend of $8,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $40,000. Required: 1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume 360 days per year for interest calculations. Bridgeport Housewares Inc. Cash Budget For the Three Months Ending November 30 September October Line Item Description Estimated cash receipts from: Cash sales V Collection of accounts receivable Total cash receipts Less estimated cash payments for: November $10,800 $13,100 $ 18,100 8,600 X $

The controller of Eridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months, You aro presented with the following butget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70 s are expected to be collected in the menth follawing the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $8,000 of the estimated menthly manufacturing costs. The annual insurance premlum is pald in January, and the annual property taxes are paid in December. Or the remakder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the batance in the followirg month. and $5,000 from Aupust sales), Sales on account for July and August were $86,000 and $95,000, respectively. Current labuties as of September 1 include 58,000 of accounts payable incurred in Aupust for manufacturing costs. All selling and administrative expenses are pold in cash in the period they are incurred. An estimated income tax payment of $16,000 wi be made in October. Bridgeports regular quarteriy dividend of $3,000 is expected to be deciared in October and paid in November. Manogeinent desires to maintain a rinimum cash balance of 540,000 . Required: The controller of Eridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months, You aro presented with the following butget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70 s are expected to be collected in the menth follawing the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $8,000 of the estimated menthly manufacturing costs. The annual insurance premlum is pald in January, and the annual property taxes are paid in December. Or the remakder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the batance in the followirg month. and $5,000 from Aupust sales), Sales on account for July and August were $86,000 and $95,000, respectively. Current labuties as of September 1 include 58,000 of accounts payable incurred in Aupust for manufacturing costs. All selling and administrative expenses are pold in cash in the period they are incurred. An estimated income tax payment of $16,000 wi be made in October. Bridgeports regular quarteriy dividend of $3,000 is expected to be deciared in October and paid in November. Manogeinent desires to maintain a rinimum cash balance of 540,000 . Required: Bridgeport Housewares Inc