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Nadia Company expects to have a cash balance of $45,000 on January 1, 2020. Nadia has budgeted the following for the first two months of
Nadia Company expects to have a cash balance of $45,000 on January 1, 2020. Nadia has budgeted the following for the first two months of the year 2020:
1. | Collections from customers: January $89,800; February $109,200. | ||
2. | Payments to suppliers: January $40,100; February $49,900. | ||
3. | Direct labour: January $29,800; February $35,000. Wages are paid in the month they are incurred. | ||
4. | Manufacturing overhead: January $25,100; February $29,900. Overhead costs are paid as incurred. | ||
5. | Selling and administrative expenses: January $15,900; February $21,800. These costs do not include depreciation and they are paid as incurred. | ||
6. | Sales of investments in January are expected to realize $10,100 in cash. Nadia Company wants to keep a minimum monthly cash balance of $20,000. |
Prepare a cash budget for January and February.
NADIA COMPANY Cash Budget For 2020 | |||||
January | February | ||||
Financing borrowing needsCash disbursementsTotal cash availableTotal disbursementsCash receiptsTotal receiptsEnding cash balanceBeginning cash balanceExcess of cash over cash disbursements | $ | $ | |||
AddLess: Total cash availableFinancing borrowing needsEnding cash balanceTotal receiptsCash receiptsExcess of cash over cash disbursementsBeginning cash balance | |||||
Manufacturing overheadLabourPayment to suppliersCollection of notes receivableSale of investmentsCollections from customersPurchase of landSelling and administrative expensesPurchase of equipment | |||||
Selling and administrative expensesCollections from customersManufacturing overheadCollection of notes receivablePurchase of landPayment to suppliersSale of investmentsLabourPurchase of equipment | |||||
Total cash availableCash receiptsBeginning cash balanceEnding cash balanceFinancing borrowing needsTotal receiptsExcess of cash over cash disbursements | |||||
AddLess: Financing borrowing needsCash disbursementsBeginning cash balanceTotal cash availableTotal disbursementsEnding cash balanceExcess of cash over cash disbursements | |||||
Selling and administrative expensesSale of investmentsPurchase of equipmentPayment to suppliersCollection of notes receivableLabourCollections from customersManufacturing overheadPurchase of land | |||||
LabourCollections from customersSelling and administrative expensesSale of investmentsManufacturing overheadCollection of notes receivablePurchase of equipmentPurchase of landPayment to suppliers | |||||
Collections from customersPurchase of landPurchase of equipmentPayment to suppliersManufacturing overheadSale of investmentsCollection of notes receivableSelling and administrative expensesLabour | |||||
Purchase of landSelling and administrative expensesPurchase of equipmentPayment to suppliersSale of investmentsLabourManufacturing overheadCollection of notes receivableCollections from customers | |||||
Beginning cash balanceExcess of cash over cash disbursementsTotal receiptsEnding cash balanceCash receiptsCash disbursementsTotal disbursementsFinancing borrowing needsTotal cash available | |||||
Excess of cash over cash disbursementsCash disbursementsEnding cash balanceCash receiptsBeginning cash balanceTotal disbursementsTotal receiptsTotal cash availableFinancing borrowing needs | |||||
Cash disbursementsCash receiptsTotal cash availableExcess of cash over cash disbursementsTotal disbursementsFinancing borrowing needsTotal receiptsBeginning cash balanceEnding cash balance | $ | $ |
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