Go to pg 1095 5 TY1 PR 21-4A Cash budget Obj. 5 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: A-Z SHOW ME HOW EXCEL TEMPLATE Sales Manufacturing costs. Selling and administrative expenses Capital expenditures September $250,000 150,000 42,000 October November $300,000 $315,000 180,000 185,000 48,000 51,000 200,000 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 $50,000 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 $40,000, marketable securities of $75,000, and accounts receivable of $300.000 ($60.000 from July sales and $240.000 from August sales). Sales on account for July and August were Il Book * Go to pg. 1095 of AA TOC A-Z 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 $50,000 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 $40,000, marketable securities of $75,000, and accounts receivable of $300,000 ($60,000 from July sales and $240,000 from August sales). Sales on account for July and August were $200,000 and $240,000, respectively. Current liabilities as of September 1 include $40,000 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 $55,000 will be made in October. Bridgeport's regular quarterly dividend of $25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $50,000. Instructions 1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Answer + 2. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller? AutoSave OFF AESU Excel PR 21-4A a Home Insert Draw Page Layout Formulas Data Review View Share Comments X [G at Wrap Text - E --- 4 v Paste = BIU Merge & Center v Insert Conditional Format Cell Formatting es Table Styles Delete Format Sort & V Filter Find & Select Ideas L L M N 0 P R S U V W Z Z AA November U27 A B E F G H 9 Answers are entered in the cels with gray backgrounds. 10 Cells with non-gray backgrounds are protected and cannot be edited. 11 in astoniski" w appear to the right of an ncorrect entry. The cosay answer will not be graded 12 Enter a zero in acil you would otherwise leave blank. 13 14 1. 15 Bridgeport Housewares Inc. 16 Cash Budget 17 For the Three Months Ending November 30 18 September October 19 Estimated cash recipts from 20 Cash sales 21 Collections from accounts receivable 22 Total cash receipts 23 Estimated cash payments for 24 Marufacturing costs 26 Scling and administrative expenses 28 Captal expenditures 27 Other purpose 28 Income tax 29 Dividends 30 To cash payments 31 Cash Incrcase decresc 32 Cash balance at beginning of month 3.9 Cash balance at end of mort 34 Mimum cash balance 36 Excess (dellency) 37 38 38 Supporting calculations 40 41 Collections of accounts receivable: 42 Bules on 43 Account Percentage 44 July 46 August sales: 40 Colected in September 47 Calected in October 48 Septembar sales 49 Colected in October 50 Calacted in Newmber 51 October sales 52 Totes 53 54 Payments for manufacturing costs: September October November O Pr. 2117-4A + # - + 100% % AutoSave OFF AESU Excel PR 21-4A a Home Insert Draw Page Layout Formulas Data Review View Share Comments X [G at Wrap Text - E --- 4 v Paste = = = Merge & Center v Insert ov Format Conditional Format Cell Formatting es Table Styles Delete Sort & V Filter Find & Select Ideas U27 X fix A B C D E F G . J L M N 0 P Q R S U V W Z Z AA JT 38 Supporting calculations: Collections of accounts receivable Sales on Account Parsanta September October November 40 41 42 43 44 45 46 47 48 45 July sales August sales: Colected in Reptember Colected in October September als Calected in October Colected in November October als Tula 51 52 Payments for manufacturing Doels: Costs on Account Purch Payments 53 54 55 56 57 58 56 61 62 A3 64 Paid in September Incumd in August Incurred in September Tota Paid in October Incurred in September Incurred in October Total Paid in November incurred in October Incumed in Novembar Tata 65 AF Ge 69 70 Key Ray Answara 71 2 72 73 74 75 76 77 78 79 BO 81 Pr. 2117-4A # - + 100%