Cash Budget The controller Shoe Mart Inc. asks you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: January February March $113,000 Sales $90.000 $153.000 Manufacturing costs 38,000 49,000 55,000 Selling and administrative expenses 34.000 26,000 31.000 Capital expenditures 37.000 full in the month following the sale and the remainder the following month. Depreciation, The company expects to sell about 12 % of its merchandise for cash. Of sales on account, 60% are expected to be collected .... insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in June, and the annual property taxes are paid in October. Of the remainder of the manufacturing costs, 80 % are expected to be paid in the month n which they are incurred and the balance in the following month. All sales and administrative expenses are paid in the month incurred. Current assets as January 1 include cash of $34,0o0, marketable securities of $49,000, and accounts receivable of $107,800 ($79,000 from December sales and $28,800 from November sales). Sales on account in s of January 1 include a $45,000, 12 % , 90-day note payable due March 20 and $7,000 of accounts payable incurred in December for November and December were $72,000 and $79,000, respectively. Current liabilities manufacturing costs. Il selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $2,700 in dividends will be received in January. An estimated income tax payment of declared in February and paid in March. Management desires to maintain a minimum cash balance $27,000. $14,000 will be made nFebruary. Shoe Mart's regular quarterly dividend of $7,000 is expected to Required: a positive number. Enter 1. Prepare a monthly cash budget and supporting schedules for January, February, and March. Enter n increase in the month's cash balance or an excess cash amount decrease in the month's cash balance or a cash deficiency as a neqative number. Assume 360 days per year for interest calculations. Required: monthly cash budget and supporting schedules for January, February, and March. Enter increase in the month's cash balance or an excess cash amount a positive number. Enter a decrease in the 1. Prepare month's cash balance ra cash deficiency as a negative number. Assume 360 days per year for interest calculations. Shoe Mart Inc. For the Three Months Ending March 31 February January March Estimated cash receipts from: 13,560 Cash sales 10.800 18,360 76,200 Collection of accounts receivable 79,120 91,344 2.700 Dividends 89,700 92,680 109,704 Total cash receipts Estimated cash payments for: s 39,800 Manufacturing costs 31,800 46,800 Selling and administrative expenses 26,000 31,000 34.000 37,000 Capital expenditures Other purposes: Note payable (including interest) 14.000 Income tax 7,000 Dividends anualy rebdaly Estimated cash receipts from: s 13,560 Cash sales 10,800 18.360 Collection of accounts receivable 76,200 79,120 91,344 2,700 Dividends 92,680 109,704 89,700 Total cash receipts Estimated cash payments for: s 39,800 S 31.800 Manufacturing costs 46,800 26,000 Selling and administrative expenses 31,000 34.000 Capital expenditures 37,000 Other purposes: Note payable (including interest) 14,000 Income tax 7,000 Dividends Total cash payments Cash increase (decrease) Cash balance at beginning of month Cash balance at end of month Minimum cash balance Excess (deficiency)
