Exercise 7-14

Enright Company expects to have a cash balance of $61,290on January 1, 2014. These are the relevant monthly budget data for the first two months of 2014.

1.	Collections from customers: January $86,290, February $161,290.
2.	Payments to suppliers: January $55,290, February $90,290.
3.	Wages: January $31,742, February $41,742. Wages are paid in the month they are incurred.
4.	Administrative expenses: January $22,742, February $25,742. These costs include depreciation of $1,000 per month. All other costs are paid as incurred.
5.	Selling expenses: January $16,742, February $21,742. These costs are exclusive of depreciation. They are paid as incurred.
6.	Sales of short-term investments in January are expected to realize $13,742 in cash. Enright has a line of credit at a local bank that enables it to borrow up to $25,000. The company wants to maintain a minimum monthly cash balance of $35,290.

Prepare a cash budget for January and February.

ENRIGHT COMPANY Cash Budget For the Two Months Ending February 28, 2014
January	February
Total disbursementsCollections from customersPayments to suppliersCash disbursementsEnding cash balanceSale of short-term investmentsWagesFinancingAdministrative expensesCash receiptsSelling expensesExcess (deficiency) of available cash over disbursementsBeginning cash balanceBorrowingsRepaymentsTotal receiptsTotal available cash	$	$
Add:	WagesAdministrative expensesBeginning cash balanceRepaymentsEnding cash balanceCash receiptsSale of short-term investmentsSelling expensesTotal available cashTotal receiptsExcess (deficiency) of available cash over disbursementsBorrowingsTotal disbursementsFinancingCollections from customersCash disbursementsPayments to suppliers
Excess (deficiency) of available cash over disbursementsCash disbursementsTotal disbursementsWagesFinancingSelling expensesRepaymentsBorrowingsBeginning cash balanceTotal receiptsPayments to suppliersAdministrative expensesTotal available cashEnding cash balanceCash receiptsCollections from customersSale of short-term investments
Total disbursementsCash disbursementsBeginning cash balanceRepaymentsWagesAdministrative expensesTotal receiptsCollections from customersSelling expensesBorrowingsPayments to suppliersExcess (deficiency) of available cash over disbursementsSale of short-term investmentsEnding cash balanceCash receiptsTotal available cashFinancing
WagesCash disbursementsExcess (deficiency) of available cash over disbursementsCollections from customersCash receiptsTotal receiptsPayments to suppliersBorrowingsBeginning cash balanceTotal available cashAdministrative expensesSelling expensesRepaymentsTotal disbursementsFinancingEnding cash balanceSale of short-term investments
Excess (deficiency) of available cash over disbursementsEnding cash balanceTotal receiptsPayments to suppliersCash receiptsBorrowingsWagesFinancingSale of short-term investmentsAdministrative expensesTotal available cashSelling expensesTotal disbursementsRepaymentsCollections from customersCash disbursementsBeginning cash balance
Less:	WagesSelling expensesFinancingCash receiptsExcess (deficiency) of available cash over disbursementsBorrowingsRepaymentsAdministrative expensesCash disbursementsCollections from customersBeginning cash balanceEnding cash balanceTotal receiptsPayments to suppliersTotal available cashTotal disbursementsSale of short-term investments
Beginning cash balanceWagesFinancingRepaymentsTotal receiptsTotal available cashSale of short-term investmentsCollections from customersAdministrative expensesEnding cash balanceTotal disbursementsCash receiptsCash disbursementsPayments to suppliersBorrowingsSelling expensesExcess (deficiency) of available cash over disbursements
Ending cash balanceRepaymentsTotal receiptsPayments to suppliersAdministrative expensesBeginning cash balanceBorrowingsTotal available cashCash disbursementsExcess (deficiency) of available cash over disbursementsTotal disbursementsWagesFinancingCash receiptsSelling expensesCollections from customersSale of short-term investments
Beginning cash balanceCollections from customersTotal available cashAdministrative expensesTotal disbursementsSelling expensesTotal receiptsBorrowingsPayments to suppliersFinancingWagesExcess (deficiency) of available cash over disbursementsRepaymentsEnding cash balanceCash receiptsSale of short-term investmentsCash disbursements
WagesCash disbursementsSelling expensesPayments to suppliersAdministrative expensesExcess (deficiency) of available cash over disbursementsTotal receiptsCollections from customersTotal disbursementsBorrowingsEnding cash balanceFinancingRepaymentsTotal available cashSale of short-term investmentsCash receiptsBeginning cash balance
Selling expensesTotal disbursementsTotal receiptsAdministrative expensesBorrowingsFinancingEnding cash balanceBeginning cash balanceCash disbursementsCash receiptsTotal available cashSale of short-term investmentsPayments to suppliersCollections from customersWagesExcess (deficiency) of available cash over disbursementsRepayments
Beginning cash balanceFinancingPayments to suppliersSale of short-term investmentsTotal disbursementsTotal available cashCash receiptsCash disbursementsEnding cash balanceWagesCollections from customersAdministrative expensesSelling expensesTotal receiptsRepaymentsExcess (deficiency) of available cash over disbursementsBorrowings
Selling expensesSale of short-term investmentsBeginning cash balanceCash disbursementsAdministrative expensesEnding cash balanceExcess (deficiency) of available cash over disbursementsPayments to suppliersCollections from customersCash receiptsTotal available cashWagesTotal receiptsBorrowingsRepaymentsTotal disbursementsFinancing
Add:	Payments to suppliersFinancingWagesExcess (deficiency) of available cash over disbursementsCash disbursementsAdministrative expensesSelling expensesCash receiptsBorrowingsEnding cash balanceRepaymentsBeginning cash balanceTotal receiptsTotal available cashCollections from customersTotal disbursementsSale of short-term investments
Less:	Selling expensesWagesCash disbursementsTotal receiptsBorrowingsAdministrative expensesTotal available cashExcess (deficiency) of available cash over disbursementsRepaymentsFinancingBeginning cash balanceTotal disbursementsPayments to suppliersEnding cash balanceCash receiptsCollections from customersSale of short-term investments
BorrowingsCash receiptsFinancingAdministrative expensesSale of short-term investmentsSelling expensesTotal receiptsCollections from customersBeginning cash balanceTotal available cashWagesRepaymentsEnding cash balanceExcess (deficiency) of available cash over disbursementsTotal disbursementsCash disbursementsPayments to suppliers	$	$

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