E22-29 Preparing the financial budget-cash budget Use the original schedule of cash receipts completed in Exercise E22-27, Requirement 1, and the schedule of cash payments completed in Exercise E22-28 to complete a cash budget for Armand Company. Additional information: Armand's beginning cash balance is $3,000, and Armand desires to maintain a minimum ending cash balance of $3,000. Armand 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 8% per year. Interest is paid at the beginning of the month on the outstanding balance from the previous month. Hlution: Requirement Schedule of Cash Receipts from Customers January February $10.6001 512 3001 March $12.900 Total Sales $35.800 50 6,360 2.120 $4240 Cash Receipts from Customers Accounts Receivable Balance, January 1 Cash sales Half amount collected for sale on credit Collection of remaining: Credit sales for January Cash sales Hall amount collected for the sales on credit Collection of remaining: Credit sales for February Cash sales Haifamount collected for sales on credit Total collections 7 380 $2.460 $4.920 $24801 7.740 22580 $12.780 $8.480 $11,960 $33.220 Calculate and show below the Accounts Receivable Balance as of March 31 $12,900 - $7,740 - $5,160/2 $2,580 Requirement 2 Revised Schedule of Cash Receipts from Customers January 10.600 February 1 2300 March 12.000 Total 35,800 Projected total sales 1 Cash sales Collected amount for sales on credit in the actual month of sale 6.360 2.544 1.272 Collected amount for sales on credit in the next month of sale Collected amount for sales on credit in the second month of sale 7380 2952 Collected amount for sales on credt in the actual month of sale Collected amount for sales on credit in the next month of sale Cash sales Collected amount for sales on credit in the actual month of sale Total cash receipts from customers 1478 7.740 3.096 12736 11.604 Amount Accounts Receivable balance, March 31: February - Credit sales (finish this 12,900 - 7.740 5160/2 5.160 2,580 Schedule of Cash Payments January February March Total 30 Cash Payments Direct Materials Accounts Payable Balance, January 1 January direct materiais purchases paid in Feb. February direct materials purchases paid in Mar. Total payments for direct materials $3.900 54.100 4,100 3.900 $8,00 3,300 Direct Labor January. Direct labor paid in January February. Direct labor paid in February March Direct labor paid in March Total payments for direct labor 3,900 3.500 3.500 3 ,300 3,900 10.700 650 Manufacturing Overhead: January Utilities for Plant paid in February February Utilitis for Plant paid in March Year Property taxes prepaid on plant Jan. 2 (150 x 12) Total payments for manufacturing overhead 1,800 1.800 650 650 350 Selling and Administrative Expenses January - Utilities for office paid in February February - Utilities for office paid in March Year Property taxes prepaid on office Jan. 2 (180 x 12) January - Office salaries paid in January February - Office salaries paid in Febrauary March - Office salaries paid in March Total payments for selling and administrative expenses 2,160 3.000 3.000 5,160 3,350 3.000 3,350 11.860 Total Cash Payments $10.260 11,800 $11,600 $33.660 March 31 liability balances: Prepaid Property Tax for Plant (150 x 12 months) Prepaid Property Tax for Office (180 x 12 monhs) Total prepaid property 1.800 2,160 Accounts Payable (March Direct Materials Purchases Paid in April) March Plant Utilities paid in April March - Utilities for office paid in April Total Utilies paid 650 350 1.000 072-27 Preparing a financial budget-schedule of cash receipts, sensitivity www decimal places. analysis Armand Company projects the following sales for the first three months of the year: $10,600 in January; $12,300 in February; and $12,900 in March. The company expects 60% of the sales to be cash and the remainder on account. Sales on account are collected 50% in the month of the sale and 50% in the following month. The Accounts Receivable account has a zero balance on January 1. Round to the nearest dollar. Requirements 1. Prepare a schedule of cash receipts for Armand for January, February, and March. What is the balance in Accounts Receivable on March 31? 2. Prepare a revised schedule of cash receipts if receipts from sales on account are 60% in the month of the sale, 30% in the month following the sale, and 10% in the second month following the sale. What is the balance in Accounts Receivable on March 31? . E22-28 Preparing a financial budget-schedule of cash payments and Company has the following projected costs for manufacturing and administrative expenses: Jan. Feb. Mar. $ 3,900 3,300 $4,600 3,500 550 550 Direct materials purchases Direct labor costs Depreciation on plant Utilities for plant Property taxes on plant Depreciation on office Utilities for office Property taxes on office Office salaries $4,100 3,900 550 650 150 550 650 650 150 550 350 350 550 350 180 3,000 180 3,000 180 3,000 All costs are paid in month incurred except: direct materials, which are paid in the month following the purchase; utilities, which are paid in the month after incurred; and property taxes, which are prepaid for the year on January 2. The Accounts Payable and Utilities Payable accounts have a zero balance on January 1. Prepare a schedule of cash payments for Armand for January, February, and March. Determine the balances in Prepaid Property Taxes, Accounts Payable, and Utilities Payable as of March 31