E7-17 Prepare a cash budget for two months 2 Rigley Company expects to have a cash balance of $46,000 on January 1, 2017. 3 These are the relevant monthly budget data for the first two months of 2017. 1. Collection from customers: January $71,000 and February $146,000. 5 3. Payments to suppliers: January $40,000, February $75,000. 5 3. Wages: January $30,000 and February $40,000. Wages are paid in the month they are incurred. 3 4. Administrative expenses: January $21,000 and February $24,000. These costs include depreciation of $1,000 per month. All other costs are paid as incurred. 05. Selling expenses: January $15,000 and February $20,000. These costs are exclusive 1 of depreciation. They are paid as incurred. 26. Sales of short-term investments in January are expected to realize $12,000 in 3 cash. Rigley has a line of credit at a local bank that enables it to borrow up 4 to $25,000. The company want to maintain a minimum monthly cash balance 5 of $20,000. 6 7 Instructions 8 Prepare a cash budget for January and February. 9 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?". a 0 1 2 RIGLEY COMPANY 3 Cash Budget 4 For the Two Months Ending February 28, 2017 5 January February 6 Beginning cash balance Value Value 7 Add: Cash receipts 8 Collections from customers Value Value 9 Sale of short-term investments Value Value 0 Total receipts ? 1 Total available cash ? ? 2 Less: Cash disbursements 3 Payments to suppliers Value Value 4 Wages Value Value 5 Administrative expenses Value Value 6 Selling expenses Value Value 7 Total disbursements ? ? 8 Excess (deficiency) of available cash over disbursements ? 9 Financing 0 Add: Borrowings Value Value 1 Less: Repayments Value Value 2 Ending cash balance ? 2 -3 4. -5 6 After you have completed E7-17, consider the following additional question -7 1. Assume that collection from customers and payment to suppliers in January changed to $80,000 -8 and $55,000 respectively. Show the impact of these changes on the Cash Budget. -9 0