MetaThe 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:

$$ September October November

Sales $

$1$

$4$

$7$

$,$

$0$

$0$

$0$

$$ $

$1$

$7$

$5$

$,$

$0$

$0$

$0$

$$ $

$2$

$3$

$7$

$,$

$0$

$0$

$0$

$$

Manufacturing costs

$6$

$2$

$,$

$0$

$0$

$0$

$7$

$5$

$,$

$0$

$0$

$0$

$8$

$5$

$,$

$0$

$0$

$0$

$$

Selling and administrative expenses

$5$

$1$

$,$

$0$

$0$

$0$

$5$

$3$

$,$

$0$

$0$

$0$

$9$

$0$

$,$

$0$

$0$

$0$

$$

Capital expenditures

$\_$

$\_$

$5$

$7$

$,$

$0$

$0$

$0$

$$

The company expects to sell about

$1$

$0$

$\%$

$$of its merchandise for cash. Of sales on account,

$7$

$0$

$\%$

$$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 $

$9$

$,$

$0$

$0$

$0$

$$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,

$8$

$0$

$\%$

$$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 $

$5$

$6$

$,$

$0$

$0$

$0$

$,$

$$marketable securities of $

$7$

$9$

$,$

$0$

$0$

$0$

$,$

$$and accounts receivable of $

$1$

$6$

$4$

$,$

$4$

$0$

$0$

$($

$

$3$

$5$

$,$

$4$

$0$

$0$

$$from July sales and $

$1$

$2$

$9$

$,$

$0$

$0$

$0$

$$from August sales

$)$

$.$

$$Sales on account for July and August were $

$1$

$1$

$8$

$,$

$0$

$0$

$0$

$$and $

$1$

$2$

$9$

$,$

$0$

$0$

$0$

$,$

$$respectively$.$ Current liabilities as of September

$1$

$$include $

$9$

$,$

$0$

$0$

$0$

$$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 $

$2$

$1$

$,$

$0$

$0$

$0$

$$will be made in October. Bridgeport

$$

s regular quarterly dividend of $

$9$

$,$

$0$

$0$

$0$

$$is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $

$5$

$5$

$,$

$0$

$0$

$0$

$.$

Required:

Question Content Area

$1$

$.$

$$ Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume

$3$

$6$

$0$

$$days per year for interest calculations.

Bridgeport Housewares Inc.

Cash Budget

For the Three Months Ending November

$3$

$0$

September October November

Estimated cash receipts from:

$

$-$

$$Select

$-$

$

$-$

$$Select

$-$

$

$-$

$$Select

$-$

$-$

$$Select

$-$

$-$

$$Select

$-$

$-$

$$Select

$-$

Total cash receipts $fill in the blank

$fill in the blank

$fill in the blank

Less estimated cash payments for:

$

$-$

$$Select

$-$

$

$-$

$$Select

$-$

$

$-$

$$Select

$-$

$-$

$$Select

$-$

$-$

$$Select

$-$

$-$

$$Select

$-$

$-$

$$Select

$-$

Other purposes:

$-$

$$Select

$-$

$-$

$$Select

$-$

Total cash payments $fill in the blank

$fill in the blank

$fill in the blank

$

$-$

$$Select

$-$

$

$-$

$$Select

$-$

$-$

$$Select

$-$

$-$

$$Select

$-$

$-$

$$Select

$-$

$-$

$$Select

$-$

Cash balance at end of month $fill in the blank

$fill in the blank

$fill in the blank

$-$

$$Select

$-$

$-$

$$Select

$-$

$-$

$$Select

$-$

Excess or

$($

deficiency

$)$

$$$fill in the blank

$fill in the blank

$fill in the blank

Question Content Area

$2$

$.$

$$ On the basis of the cash budget prepared in part

$($

$1$

$)$

$,$

$$what recommendation should be made to the controller?

The budget indicates that the minimum cash balance

$$be maintained in November. This situation can be corrected by

$$and

$/$

or by the

$$of the marketable securities

$,$

$$if they are held for such purposes. At the end of September and October, the cash balance will

$$the minimum desired balance.