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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
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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