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Management believes in keeping a minimum cash balance of $20,000 at the end of each month. The company can borrow from the bank at 12%
Management believes in keeping a minimum cash balance of $20,000 at the end of each month. The company can borrow from the bank at 12% annual interest. All borrowing must be done at the beginning of the month, and repayments must be done at the end of the month. Borrowings and repayments must also be in increments of $1,000. Interest is paid at the end of each quarter. Round all interest payments to the nearest whole dollar. The company wishes to use any excess cash to pay off the loan as rapidly as possible. Required: 1. Prepare a Sales Budget, Production Budget, Direct Materials Budget, Direct Labour Budget, Manufacturing Overhead Budget and Sales and Administration Budget. 2. Prepare Schedules of Expected Cash Collections and Expected Cash Disbursements for Materials as well as a Cash Budget. 3. Prepare a Budgeted Income Statement for the Quarter Ended June 30\"\". 4. Prepare a Budgeted Balance Sheet at June 30\"\". Use excel to do yourwork. Use cell references and formulas in your schedules. Check gures: Total cash collections for the quarter 416,000 Total required production in units 1,130 Raw materials purchased in the quarter {board feet] 16,4625 Interest expense 1,030 Ending cash balance ?6,245 Total cost of goods manufactured for the quarter 282,450 Total assets 4?5,6?4
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