For the first quarter of 2012, use Excel Worksheet 5-3 to prepare a cash budget

Part 5 (Chapter 23) Waterways Corporation is preparing its budget for the coming year, 2012. The first step is to plan for the first quarter of that coming year. Waterways gathered the following information from the managers. Sales Expected unit sales for January 2012 Expected unit sales for February 2012 Expected unit sales for March 2012 Expected unit sales for April 2012 Expected unit sales for May 2012 Unit selling price 113,500 112,500 116,750 125,500 137,250 $15 waterways likes to keep 12% of the next month's unit sales in ending inventory. All sales are on account 80% of the Accounts Receivable are collected in the month of sale, and 20% of the Accounts Recevable are collected in the month after sale. Accounts receivable on December 31, 2011, totaled $185,750 t Materi Metal, plastic, and rubber together are 72 per pound per unit. Each unit requires 2 pounds. Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Payment for materials is made within 15 days 52% is paid in the month of purchase, and 48% is paid in the month after purchase. Accounts Payable on December 31, 2011, totaled $120,650. Raw Materials on December 31, 2011, totaled 10,355 pounds. Labor requires 12 minutes per unit for completion and is paid at a rate of $9 per hour an 35 per labor hour 50 per labor hour 40 per labor hour 284 per labor hour Indirect materials Indirect labor Utilities Maintenance Salaries Depreciation Property taxes Insurance Maintenance $42,500 per month $16,650 per month S2,500 per month $1,200 per month $1,300 per month Variable selling and administrative cost per unit is $1.62 $15,000 a month $1,500 a month $72,500 a month S2,500 a month S3,000 a month Salaries Other fixed costs Other Information The Cash balance on December 31, 2011, totaled $12,500, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2012. Dividends are paid each month at the rate of $2.25 per share for 5,000 shares outstanding. The company has an open line of credit with Romney's Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 6.5% interest Waterways borrows on the first day of the month and repays the entire amount, with interest, on the last day of the following month. A $525,000 equipment purchase is planned for February