Cash Receipts from Customers

January

February

March

Total

Total sales

$11,200

$16,100

$10,400

$37,700

January

February

March

Total

Cash Receipts from Customers:

Accounts Receivable balance, January 1

JanuaryCash sales

$7,840

JanuaryCredit sales, collection of January sales in January

1,680

JanuaryCredit sales, collection of January sales in February

$1,680

FebruaryCash sales

11,270

FebruaryCredit sales, collection of February sales in February

2,415

FebruaryCredit sales, collection of February sales in March

$2,415

MarchCash sales

7,280

MarchCredit sales, collection of March sales in March

1,560

Total cash receipts from customers

$9,520

$15,365

$11,255

$36,140

Accounts Receivable balance, March 31:

MarchCredit sales, collection of March sales in April

$1,560

's

beginning cash balance is

$3,000

and

Graham

desires to maintain a minimum ending cash balance of

$3,000.

Graham

borrows cash as needed at the beginning of each month in increments of $1,000 and repays the amounts borrowed in increments of $1,000 at the beginning of months when excess cash is available. The interest rate on amounts borrowed is

14%

per year. Interest is paid at the beginning of the month on the outstanding balance from the previous month.

	January	February	March	Total
Cash Payments
Direct Materials:
Accounts Payable balance, January 1		$0
JanuaryDirect material purchases paid in February			$3,900
FebruaryDirect material purchases paid in March				$4,000
Total payments for direct materials		0	3,900	4,000	$7,900
Direct Labor:
Total payments for direct labor		2,700	3,100	4,400	10,200

Manufacturing Overhead:
Utilities for plant			750	750	1,500
Property taxes on plant		1,440			1,440
Total payments for manufacturing overhead		1,440	750	750	2,940
Selling and Administrative Expenses:
Utilities for office			550	550	1,100
Property taxes on office		2,040			2,040
Office salaries		4,000	4,000	4,000	12,000
Total payments for Selling and Admin. expenses		6,040	4,550	4,550	15,140
Total cash payments		$10,180	$12,300	$13,700	$36,180

Acccount balances, March 31:
Prepaid Property Taxes		$2,610
Accounts Payable		$4,200
Utilities Payable		$1,300

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Graham Company

Cash Budget

January, February, and March

		January
Beginning cash balance
Cash receipts
Cash available
Cash payments:
Purchases of direct materials
Direct labor
Manufacturing overhead
Selling and administrative expenses
Interest expense
Total cash payments
Ending cash balance before financing
Minimum cash balance desired
Projected cash excess (deficiency)
Financing:
Borrowing
Principal repayments
Total effects of financing
Ending cash balance