D34 fx A B D E F GHI J K L M N Choose Exercise (1 only) 0 Q CASH-BUDGET-2 Perez Company has a beginning balance of cash on April 1 of $20,000. Cash collections for April, May and June are expected to be $90,000, 10 $135,000 and $90,000 respectively. 11 12 Payments for direct materials for the three month period will be $40,000, 13 $50,000, and $45,000 respectively. 14 15 Direct labor costs for April, May and June are likely to be $40,000, 16 $40,000 and $60,000 respectively. 17 18 Factory overhead costs for the three month period are estimated to be $22,500, 19 $22,500, and $25,000. 20 Note: The factory overhead costs include factory depreciation of $2,500 each month. 21 22 Selling and Administrative costs for the three months are $15,000 each month. 23 + 24 The company plans to sell marketable securities in June in the amount of $70,000. 25 26 Perez Company has a line of credit which allows the company to borrow up to 27 $25,000 of cash, in $1,000 increments. The company plans to maintain a minimum 28 cash balance of $20,000 each month. 29 30 On April 1, Perez borrows $25,000 on a 3-month 6% note. The interest amount will 31 be 25,000*.06*3/12=$375. 32 33 CASH BUDGET APRIL MAY JUNE AM J 34 Beginning Cash Balance 20,000 1 0 0 35 Cash Receipts: 36 Collections from Customers 37 Sale of Securities 1 1 0 38 Total Cash Available 20,000 0 39 40 Cash Payments: 41 Direct Materials 0 0 0 42 Direct Labor 43 Factory Overhead 44 Selling and Admin. Expenses 45 Total Payments 46 47 Excess or Deficiency* 20,000 48 Financing 49 Borrowing (show as positive)12 Payments for direct materials for the three month period will be $40,000, 13 $50,000, and $45,000 respectively. 14 15 Direct labor costs for April, May and June are likely to be $40,000, 16 $40,000 and $60,000 respectively. 17 18 Factory overhead costs for the three month period are estimated to be $22,500, 19 $22,500, and $25,000. 20 Note: The factory overhead costs include factory depreciation of $2,500 each month. 21 22 Selling and Administrative costs for the three months are $15,000 each month. 23 24 The company plans to sell marketable securities in June in the amount of $70,000. 25 26 Perez Company has a line of credit which allows the company to borrow up to 27 $25,000 of cash, in $1,000 increments. The company plans to maintain a minimum 28 cash balance of $20,000 each month. 29 30 On April 1, Perez borrows $25,000 on a 3-month 6% note. The interest amount will 31 be 25,000*.06*3/12=$375. 32 33 CASH BUDGET APRIL MAY JUNE AMJ 34 Beginning Cash Balance 20,000 1 0 0 35 Cash Receipts: 36 Collections from Customers 37 Sale of Securities 1 1 0 38 Total Cash Available 20,000 o 39 40 Cash Payments: 41 Direct Materials 42 Direct Labor 43 Factory Overhead 44 Selling and Admin. Expenses 45 Total Payments o 46 20,000 ol 0 47 Excess or Deficiency* 48 Financing 49 Borrowing (show as positive) Show repayment as negative. 50 Repayments with Interest Ending Cash Balance 20,000 0 1 0 0 51 52 53 * If there is a deficiency, or excess is less than $20,000, borrow money to bring 54 the balance to $20,000. 55 ALT-CASH-BUDGET