How do I prepare a cash budget that is similar to Illustration 22.19 (illustration attached) I need to prepare schedules for expected collections from customers and expected payments to vendors first like in Illustrations 22.17 and 22.18 (also attached) but how do I find these values? I've included data and previous work as well. Please explain what data went into each section or show formulas because I am confused.
Illustration 22.17
Illustration 22.18
Illustration 22.19
H C D E F G Serious Business, Inc. The company is preparing its budget for the coming year, 2020. The first step is to plan for the FIRST QUARTER of that 2 coming year. The following information has been gathered from their managers 3 4 Sales Information 5 Period Units 6 November 113,000 Actual 7 December 101,000 Actual 8 January 111,000 Planned 9 February 112,000 Planned | Grading guidelines are on the instructions Grading 10 March 114,000 Planned 11 tab. April 124,000 Planned 12 May 136,000 Planned 13 Unit selling price $ 12.00 14 15 Finished Goods Inventory Planning 16 The company likes to keep 10% of the next month's unit sales in finished goods ending inventory. 17 18 Accounts Receivable & Collections 19 Sales on Account 100% ! 20 Collections Activity 21 Month of Sale 85% 22 Month after Sale 15% 23 Balance at 12/31/19 $ 185,000.00 24 Materials Inventory Costs & Planning Direct Materials Amount Used per Unit Cost Metal 2 lb $ 1.00 lb The company likes to keep 5% of the material needed for the next month's production in raw materials ending inventory. 100% Accounts Payable & Disbursements Purchases on Account Payment Activity Month of Purchase Month after Purchase Balance at 12/31/19 50% 50% 120,000 $ Direct Labor & Costs Time per Unit Production Pay Rate/Hour $ 9 minutes 7.00 0.30 0.45 0.45 0.25 Manufacturing Overhead Costs Variable costs per direct labor hour Indirect materials Indirect labor Utilities Maintenance Fixed costs per month Salaries Depreciation Property taxes Insurance Janitorial $ 42,000 16,800 2,675 1,200 1,300 $ 1.45 Selling and Administrative Costs Variable costs per unit sold Fixed costs per month Advertising Insurance Salaries Depreciation Other fixed costs 15,000 14,000 72,000 25,000 3,000 Income Taxes Accrued on Monthly Net Income Amounts Accrued Q4 2019, paid January 2020 35% rounded to nearest dollar 200,000 $ Serious Business Inc. Sales Budget For the First Quarter January February 111,000 112,000 $12 $12 $1,332,000 $1,344,000 Expected Sales Units Unit Selling price Total Sales March 1st Quarter 114,000 337,000 $121 $1,368,000 $4,044,000 $12 Budgeted Sales Add: Desired Closing inventory Total Needed Less: Opening Inventory Production Units Production Budget January February 111,000 112,000 11,200 11,400 122,200 123,400 11,100 11,200 111,100 112,200 March 1st Quarter 114,000 337,000 12,400 12,400 126,400 349,400 11,400 11,100 115,000 338,300 April 124,000 13,600 137,600 12,400 125,200 March 1st Quarter 115,000 338,300 Direct Material Budget January February Production Units 111,100 112,200 Multiply by: Unit of DM needed per unit Direct material units needed for productio 222,200 224,400 Add: Closing inventory of DM 11,220 11,500 Total Material required 233,420 235,900 Less: Opening Inventory 11,110 11,2201 Quantity to purchase 222,310 224,680 Cost per pound $1.00 $1.00 Total cost of DM purchase $222,310 $224,680 230,000 12,520 242,5201 11,500 231,020 $1.00 $231,020 676,600 12,520 689,120 11,110 678,010 $1.00 $678,010 Units to be produced Direct Labor Time (hours) Per Unit Total Required Direct Labor Hours Direct Labor Cost Per Hour Total Direct Labor Cost Serious Business, Inc. Direct Labor Budget For the first Quarter January i February 111,100 112,200 0.15 0.15 16,665 16,830 $ 7.00 $ 7.00 $ 116,655.00 $ 117,810.00 March 01 115,000 338,300 0.15 0.15 17,250 50,745 7.00 $ 7.00 120,750.00 $ 355,215.00 $ $ March 17,250 1st Quarter 50,745 Manufacturing Overhead Budget January February Direct Labor hours 16,665 16,830 Variable Cost Indirect material - $0.30 per hour $5,000 $5,049 Indirect labor-$0.45 per hour $7,499 $7,574 Utilities $0.45 per hour $7,499 $7,574 Maintenance - $0.25 per hour $4,166 $4,208 Total Variable cost $24,164 $24,404 Fixed Cost Salaries $42,000 $42,000 Depreciation $16,800 $16,800 Property taxes $2,675 $2,675 Insurance $1,200 $1,200 Janitorial $1,300 $1,300 Total Fixed Cost $63,975 $5,175 $7,763 $7,763 $4,313 $25,013 $15,224 $22,835 $22,835 $12,686 $73,580 $42,000 $16,800 $2,675 $1,200 $1,300 $63,975 $126,000 $50,400 $8,025 $3,600 $3,900 $191,925 $88,139 $88,379 $88,988 $265,505 Total Manufacturing Overhead Manufacturing overhead rate per hour $5.23 Serious Business Inc. Selling and administrative Expenses Budget For the First Quarter | January February 111,000 112,000 March 114,000 1st Quarter 337,000 Expected Sales Units Variable expenses Total Variable expense 160,950 160,950 162,400 162,400 165,300 165,300 488,650 Fixed Expenses Advertising Insurance Salaries Depreciation Other fixed costs Total Fixed expenses 15,000 14,000 72,000 25,000 3,000 129,000 15,000 14,000 72,000 25,000 3,000 129,000 15,000 14,000 72,000 25,000 3,000 129,000 45,000 42,000 216,000 75,000 9,000 387,000 Total Selling and administrative expenses $289,950 $291,4001 $294,300 $875,650 2 DEF Hayes Company Schedule of Expected Collections from Customers Collections by Quarter Sales 5 Accounts receivable, 12/31/21 $ 60,000 6 First quarter $180,000 108,000 $ 72,000 | 7 Second quarter 210,000 126,000 $ 84,000 8 Third quarter 240,000 144,000 $ 96,000 9 Fourth quarter 270,000 162,000 Total collections $168,000 $198.000 $228,000 $258,000 12 Per illustration 22.3: $180,000 x .60: $180,000 x .40 H . . F Hayes Company Home Insert Page Layout Formulas Data Review View P18 fx A B C D E Hayes Company Schedule of Expected Payments for Direct Materials Payments by Quarter Purchases 1 2 3 5 Accounts payable, 12/31/21 $10,600 6 First quarter $25,200 12,600 $12,600 7 Second quarter 29,200 14,600 $14,600 8 Third quarter 33,200 16,600 9 Fourth quarter 37,200 10 Total payments $23,200 $27,200 $31,200 $16,600 18,600 $35,200 12 Per Illustration 22.9, b$25,200 x .50; $25,200 x .50 Hayes Company Cash Budget For the Year Ending December 31, 2022 Quarter Assumption $ 38,000 $25.500 $ 15,000 $ 19,400 198,000 228,000 0 168,000 2,000 170,000 208,000 258,000 0 258,000 277,400 198,000 223,500 228,000 243,000 6 Beginning cash balance 7 Add: Receipts 8 Collections from customers 9 Sale of investment securities 10 Total receipts 11 Total available cash 12 Less: Disbursements 13 Direct materials Direct labor 15 Manufacturing overhead 16 Selling and administrative expenses 17 Purchase of truck Income tax expense 19 Total disbursements Excess (deficiency) of available cash 20 over cash disbursements 21 Financing 22 Add: Borrowings 23 Less: Repayments including interest 24 Ending cash balance 23,200 62,000 53,300 41,000 27,200 72,000 56,300 43,000 10,000 3,000 211,500 31,200 82,000 59,300 45,000 35,200 92,000 62,300 47,000 3,000 182,500 3,000 220,500 3,000 239,500 25,500 12,000 22,500 37,900 3,000 3,100 $ 19,400 $ 25,500 $ 15,000 $ 37,900 25 26 $57,100 - $3,800 depreciation 27 b$42,000 - $1,000 depreciation
