Consider the following information about Elmwood Manufacturing Company: Estimated Estimated Factory Estimated Selling and Month Sales Overhead Administrative Expenses December Year 1 $1,700,000 $610,000 $1,205,000 January Year 2 1,700,000 620,000 1,345,000 February Year 2 10,700,000 620,000 1,255,000 March Year 2 1,400,000 670,000 1,220,000 April Year 2 4,450,000 670,000 1,250,000

The company has found that approximately 45 percent of sales are collected during the month the sale is made and the remaining 55 percent are collected during the month following the sale. Material purchases are 40 percent of next months estimated sales, and payments lag these purchases by one month. Labor costs are 40 percent of next months sales and are paid during the month incurred. Factory overhead and selling and administrative expenses are paid during the month incurred. In addition, a payment for new equipment of $1 million is due in February. Also, a tax payment of $2.0 million and a dividend payment of $680,000 are due in March.

The companys projected cash balance at the beginning of January is $1.5 million. Furthermore, Elmwood desires to maintain a $750,000 cash balance at the end of each month. Prepare a cash budget for Elmwood Manufacturing Company for the first three months of Year 2.

Enter your answers as positive values, but use minus sign to indicate the lack of available cash. Enter zero if necessary. Do not leave any cells blank. Round your answers to the nearest dollar.

Cash Budget First Quarter, Year 2

December

Sales

Projected cash balance, beginning of month

Receipts:

Collection of A/R

Total cash available

Disbursements Payments of A/P

Labor expenses

Factory overhead

Selling and adm. expenses

Taxes

Dividends

Purchase of new equipment

Total disbursements

Excess of available cash over disbursements

Incremental cash loans needed to maintain a balance of $750,000

Loan repayment

Projected cash balance, end of month

January

Sales

Projected cash balance, beginning of month

Receipts:

Collection of A/R

Total cash available

Disbursements Payments of A/P

Labor expenses

Factory overhead

Selling and adm. expenses

Taxes

Dividends

Purchase of new equipment

Total disbursements

Excess of available cash over disbursements

Incremental cash loans needed to maintain a balance of $750,000

Loan repayment

Projected cash balance, end of month

February

Sales

Projected cash balance, beginning of month

Receipts:

Collection of A/R

Total cash available

Disbursements Payments of A/P

Labor expenses

Factory overhead

Selling and adm. expenses

Taxes

Dividends

Purchase of new equipment

Total disbursements

Excess of available cash over disbursements

Incremental cash loans needed to maintain a balance of $750,000

Loan repayment

Projected cash balance, end of month

March

Sales

Projected cash balance, beginning of month

Receipts:

Collection of A/R

Total cash available

Disbursements Payments of A/P

Labor expenses

Factory overhead

Selling and adm. expenses

Taxes

Dividends

Purchase of new equipment

Total disbursements

Excess of available cash over disbursements

Incremental cash loans needed to maintain a balance of $750,000

Loan repayment

Projected cash balance, end of month

April

Sales

Projected cash balance, beginning of month

Receipts:

Collection of A/R

Total cash available

Disbursements Payments of A/P

Labor expenses

Factory overhead

Selling and adm. expenses

Taxes

Dividends

Purchase of new equipment

Total disbursements

Excess of available cash over disbursements

Incremental cash loans needed to maintain a balance of $750,000

Loan repayment

Projected cash balance, end of month