Hello,

I need help creating a cash budget. I am pasting the information below.

The results of operations for the Preston Manufacturing Company for the fourth quarter of 2020 were as follows:

Sales					$	550,000
Less variable cost of sales						330,000
Contribution margin						220,000
Less fixed production costs		$	120,000
Less fixed selling and administrative expenses			55,000			175,000
Income before taxes						45,000
Less taxes on income						18,000
Net income					$	27,000

Note: Preston Manufacturing uses the variable costing method. Thus, only variable production costs are included in inventory and cost of goods sold. Fixed production costs are charged to expense in the period incurred. The company's balance sheet as of the end of the fourth quarter of 2020 was as follows:

Assets:
	Cash		$	160,000
	Accounts receivable			220,000
	Inventory			385,000
	Total current assets			765,000
	Property, plant, and equipment			440,000
	Less accumulated depreciation			110,000
Total assets		$	1,095,000
	Liabilities and owners' equity:
	Accounts payable		$	66,000
	Common stock			540,000
	Retained earnings			489,000
	Total liabilities and owners' equity		$	1,095,000

Additional information:

1.		Sales and variable costs of sales are expected to increase by 12 percent in the next quarter.
2.		All sales are on credit with 60 percent collected in the quarter of sale and 40 percent collected in the following quarter.
3.		Variable cost of sales consists of 40 percent materials, 40 percent direct labor, and 20 percent variable overhead. Materials are purchased on credit. Fifty percent are paid for in the quarter of purchase, and the remaining amount is paid for in the quarter after purchase. The inventory balance is not expected to change. Also, direct labor and variable overhead costs are paid in the quarter the expenses are incurred.
4.		Fixed production costs (other than $9,000 of depreciation expense) are expected to increase by three percent. Fixed production costs requiring payment are paid in the quarter they are incurred.
5.		Fixed selling and administrative costs (other than $7,000 of depreciation expense) are expected to increase by two percent. Fixed selling and administrative costs requiring payment are paid in the quarter they are incurred.
6.		The tax rate is expected to be 20 percent. All taxes are paid in the quarter they are incurred.
7.		No purchases of property, plant, or equipment are expected in the first quarter of 2021.

(a)

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Prepare a budgeted income statement for the first quarter of 2021.

Preston Manufacturing Company Budgeted Income Statement choosetheaccountingperiod March 31, 2021For the Year Ended March 31, 2021For the Quarter Ended March 31, 2021
selectanincomestatementitem Net income/(loss)Fixed selling and administrative expensesVariable cost of salesIncome before taxesContribution marginSalesFixed production costsTaxes on income				$enteradollaramount
selectbetweenadditionanddeduction AddLess: selectanincomestatementitem Fixed production costsFixed selling and administrative expensesSalesNet income/(loss)Income before taxesContribution marginTaxes on incomeVariable cost of sales				enteradollaramount
selectasummarizinglineforthefirstpart Fixed production costsTaxes on incomeContribution marginFixed selling and administrative expensesNet income/(loss)Variable cost of salesIncome before taxesSales				enteratotalamountforthefirstpart
selectbetweenadditionanddeduction AddLess:
selectanincomestatementitem Net income/(loss)SalesContribution marginTaxes on incomeIncome before taxesVariable cost of salesFixed selling and administrative expensesFixed production costs		$enteradollaramount
selectanincomestatementitem Net income/(loss)Contribution marginTaxes on incomeFixed production costsSalesFixed selling and administrative expensesVariable cost of salesIncome before taxes		enteradollaramount
				enter a subtotal of the two previous amounts
selectasummarizinglineforthesecondpart Income before taxesFixed selling and administrative expensesFixed production costsSalesNet income/(loss)Contribution marginTaxes on incomeVariable cost of sales				enter a total amount for all two parts
selectbetweenadditionanddeduction AddLess: selectanincomestatementitem Taxes on incomeNet income/(loss)Fixed selling and administrative expensesSalesVariable cost of salesFixed production costsIncome before taxesContribution margin				enteradollaramount
selectaclosingnameforthisstatement SalesFixed selling and administrative expensesContribution marginFixed production costsIncome before taxesTaxes on incomeNet income/(loss)Variable cost of sales				$enteratotalnetincomeorlossamount

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Attempts: 1 of 1 used

(b)

Prepare a cash budget for the first quarter of 2021.

Preston Manufacturing Company Cash Budget choosetheaccountingperiod For the Year Ended March 31, 2021For the Month Ended March 31, 2021For the Quarter Ended March 31, 2021
selectanopeningnameforsectionone Cash receiptsCash collected from salesPayment for variable overheadEnding cash balanceTotal cash paymentsExcess/(deficiency) of receipts over disbursementsPayment for fixed production costsCash paymentsPayment of materialPayment for laborPayment for fixed selling and admistration expenseDepreciation of equipmentBeginning cash balancePayment of income taxes:
selectacashbudgetitem Payment for fixed selling and admistration expensePayment of materialCash receiptsPayment of income taxesTotal cash paymentsPayment for fixed production costsPayment for variable overheadEnding cash balanceExcess/(deficiency) of receipts over disbursementsCash collected from salesPayment for laborBeginning cash balanceCash paymentsDepreciation of equipment				$enteradollaramount
selectanopeningnameforsectiontwo Beginning cash balanceExcess/(deficiency) of receipts over disbursementsPayment of materialPayment for fixed selling and admistration expenseDepreciation of equipmentCash collected from salesPayment for fixed production costsPayment of income taxesTotal cash paymentsCash receiptsEnding cash balancePayment for laborCash paymentsPayment for variable overhead:
selectacashbudgetitem Payment for variable overheadPayment for fixed selling and admistration expenseDepreciation of equipmentPayment of income taxesPayment for laborTotal cash paymentsCash paymentsExcess/(deficiency) of receipts over disbursementsCash receiptsBeginning cash balanceCash collected from salesPayment for fixed production costsEnding cash balancePayment of material		$enteradollaramount
selectacashbudgetitem Excess/(deficiency) of receipts over disbursementsCash paymentsPayment for fixed production costsEnding cash balanceDepreciation of equipmentCash receiptsPayment of income taxesPayment of materialCash collected from salesBeginning cash balancePayment for fixed selling and admistration expensePayment for laborTotal cash paymentsPayment for variable overhead		enteradollaramount
selectacashbudgetitem Depreciation of equipmentPayment of materialPayment for variable overheadEnding cash balanceTotal cash paymentsCash collected from salesBeginning cash balancePayment for fixed selling and admistration expenseCash paymentsExcess/(deficiency) of receipts over disbursementsPayment for laborPayment for fixed production costsPayment of income taxesCash receipts		enteradollaramount
selectacashbudgetitem Cash paymentsPayment for variable overheadDepreciation of equipmentBeginning cash balancePayment of materialCash collected from salesPayment for fixed production costsExcess/(deficiency) of receipts over disbursementsCash receiptsTotal cash paymentsPayment for fixed selling and admistration expenseEnding cash balancePayment for laborPayment of income taxes		enteradollaramount
selectacashbudgetitem Payment for fixed production costsPayment for variable overheadCash collected from salesPayment for laborExcess/(deficiency) of receipts over disbursementsCash paymentsPayment of materialBeginning cash balanceDepreciation of equipmentEnding cash balancePayment for fixed selling and admistration expensePayment of income taxesTotal cash paymentsCash receipts		enteradollaramount
selectacashbudgetitem Payment for fixed production costsExcess/(deficiency) of receipts over disbursementsCash collected from salesPayment for variable overheadTotal cash paymentsCash paymentsPayment of materialPayment for laborDepreciation of equipmentPayment for fixed selling and admistration expenseEnding cash balancePayment of income taxesCash receiptsBeginning cash balance		enteradollaramount
selectaclosingnameforsectiontwo Payment for variable overheadBeginning cash balanceCash paymentsPayment of materialPayment of income taxesPayment for fixed production costsPayment for laborDepreciation of equipmentTotal cash paymentsPayment for fixed selling and admistration expenseEnding cash balanceCash collected from salesCash receiptsExcess/(deficiency) of receipts over disbursements				enteratotalamountforsectiontwo
selectasummarizinglineforthefirstpart Cash receiptsPayment for fixed production costsExcess/(deficiency) of receipts over disbursementsPayment of materialEnding cash balancePayment for variable overheadTotal cash paymentsPayment for laborPayment of income taxesCash paymentsCash collected from salesPayment for fixed selling and admistration expenseBeginning cash balanceDepreciation of equipment				$enteratotalamountforthefirstpart
selectbetweenadditionanddeduction LessAdd: selectacashbudgetitem Cash paymentsExcess/(deficiency) of receipts over disbursementsPayment for laborCash collected from salesPayment of income taxesEnding cash balanceTotal cash paymentsPayment of materialCash receiptsPayment for fixed production costsBeginning cash balancePayment for variable overheadDepreciation of equipmentPayment for fixed selling and admistration expense				enteradollaramount
Selectaclosingcashbudgetitem Total cash paymentsCash receiptsCash paymentsPayment of income taxesPayment for laborPayment for fixed production costsCash collected from salesBeginning cash balanceExcess/(deficiency) of receipts over disbursementsPayment for fixed selling and admistration expenseDepreciation of equipmentEnding cash balancePayment of materialPayment for variable overhead				$enteratotalamountforthecashbudget