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Cash Budget

The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

	September		October		November
Sales	$138,000		$175,000		$226,000
Manufacturing costs	58,000		75,000		81,000
Selling and administrative expenses	48,000		53,000		86,000
Capital expenditures	_		_		54,000

The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $10,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of September 1 include cash of $52,000, marketable securities of $75,000, and accounts receivable of $154,000 ($121,000 from July sales and $33,000 from August sales). Sales on account for July and August were $110,000 and $121,000, respectively. Current liabilities as of September 1 include $10,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $21,000 will be made in October. Bridgeports regular quarterly dividend of $10,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $51,000.

Required:

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1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign. Assume 360 days per year for interest calculations.

Bridgeport Housewares Inc. Cash Budget For the Three Months Ending November 30

	September	October	November
Estimated cash receipts from:
Cash sales	$fill in the blank	$ fill in the blank	$fill in the blank
Collection of accounts receivable	fill in the blank	fill in the blank	fill in the blank
Total cash receipts	$fill in the blank	$fill in the blank	$fill in the blank
Less estimated cash payments for:
Manufacturing costs	$ fill in the blank	$ fill in the blank	$ fill in the blank
Selling and administrative expenses	fill in the blank	fill in the blank	fill in the blank
Capital expenditures			fill in the blank
Other purposes:
Income tax		fill in the blank
Dividends			fill in the blank
Total cash payments	$fill in the blank	$fill in the blank	$fill in the blank
Cash increase or (decrease)	$Cash increase or (decrease)	$Cash increase or (decrease)	$Cash increase or (decrease)

Plus cash balance at beginning of month	fill in the blank	fill in the blank	fill in the blank
Cash balance at end of month	$fill in the blank	$fill in the blank	$fill in the blank
Less minimum cash balance	fill in the blank	fill in the blank	fill in the blank
Excess or (deficiency)	$fill in the blank	$fill in the blank	$fill in the blank