Exercise 10-29

Compute the amount the company needs to finance or the excess cash available for Marsha to invest.

Cash balance, beginning $ 15,000

Collections from customers 145,000

Direct materials purchases 25,000

Expenses :

Operating expenses 50,000

Payroll 75000

Income taxes 6,000

other :

Machinery Purchases 30,000

Operating expenses include $ 20,000 depreciation for building and equipment. All purchase of materials are paid for in the period of purchase. The company requires a minimum cash balance of $25,000

Make Marsha Inc cash Budget for coming year

Marsha Inc.

Cash Budget for Coming Year

Beginning cash balance

Net cash flow from operations:

Cash inflows:

Cash collections from customers

Cash outflows:

Direct materials purchases

Operating expenses

Less:

DepreciationPayrollIncome taxes

Investing activities

Purchase of machinery

Financing activities:

Cash excess (shortage) before financing

Minimum cash balance required

New financing required

Budgeted end-of-period cash balance