need the answer for cash collection and combined cash

136 X f $ B D E F G H 1 Osborne Manufacturing is preparing its master budget for the 2 first quarter of the upcoming year. The following data pertain 3 to Osborne Manufacturing's operations: 4 5 Current assets as of December 31 (prior year); 6 Cash $ 4,640 7 Accounts receivable, net $ 57,600 8 Inventory $ 15,600 9 Property, plant, and equipment, net $ 141,500 10 Accounts payable $ 52,800 11 Capital stock $ 124,500 12 Retained earnings $ 22,800 13 14 a Actual sales in December were 72,000. Selling price per unit is projected 15 to remain stable at $12 per unit throughout the budget period. Sales for 16 the first five months of the upcoming year are budgeted to be as follows: 17 January $ 104,400 18 February $ 126,000 19 March $ 122,600 20 April $ 119,500 $ 135,400 22 23b Sales are 20% cash and 80% credit. All credit sales are collected in the 24 month following the sale. 25 Osborne Manufacturing has a policy that states that each month's ending 21 May 26 26 g Osborne Manufacturing has a policy that states that each month's ending inventory of finished goods should be 10% of the following month's sales (in units). 27 28 29 30 d 31 Of each month's direct material purchases, 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two kilograms of direct material is needed per unit at $2.25 per kilogram. Ending inventory of direct materials should be 30% of next month's production needs. 32 33 34 35 36 e 37 38 39 40 41 f 42 43 44 45 Monthly manufacturing conversion costs are $4,500 for factory rent, $3,500 for other fixed manufacturing expenses, and $1.25 per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred. Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Osborne Manufacturing will purchase equipment for $6,000 (cash), while February's cash expenditure will be $12,800, and March's cash expenditure will be $15,600. 46 47 48 49 g 50 51 Operating expenses are budgeted to be $1.30 per unit sold plus fixed operating expenses of $2,500 per month. All operating expenses are paid in the month in which they are incurred. g Operating expenses are budgeted to be $1.30 per unit sold plus fixed operating expenses of $2,500 per month. All operating expenses are paid in the month in which they are incurred. h Depreciation on the building and equipment for the general and administrative offices is budgeted to be $4,500 for the entire quarter, which includes depreciation on new acquisitions. Osborne Manufacturing has a policy that the ending cash balance in each month must be at least $4,200. The company has a line of credit with a local bank. It can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $130,000. The interest rate on these loans is 2% per month simple interest (not compounded). Osborne Manufacturing pays down the line of credit balance if it has excess funds at the end of the quarter. The company also pays the accumulated interest at the end of the quarter on the funds borrowed i The company's income tax rate is projected to be 20% of operating income less interest expense. The company pays $10,800 cash at the end of February in estimated taxes. 1 Uary 1 Prepare a schedule of cash collections for January, March, and for the quarter in total 2 3 4 Cash Collections Budget January February March Quarter 6 Cash Sales 7 Credit Sales 8 Total cash collections 9 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Sheet Cash Collections Production Sheet2 Direct Materials Cash pmt's for D - 1 2 Perpare a production budget. (Hint: Unit sales Sales in dollars/ Selling price per unit 2 3 4 Production Budget 5 January February March Quarter April May 6 Unit Sales 8700 10500 10217 29417 9958 11283 7 Plus: Desired ending inventor 10% 1050 1022 996 996 1128 8. Total needed 9750 11522 11213 30413 11087 9 Less: Beginning inventory 870 1050 1022 870 996 10 Units to produce 8880 10472 10191 29543 10091 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 3 Perpare a direct materials budget 2 3 Direct Materials Budget 4 January February March Quarter April 5. Units to be produced 8800 10472 10191 29543 10091 6 xkg of DM needed per unit 2 2 2 2 2 7 Quantity (kg) needed for production 17600 20944 20382 59086 20182 8 Plus: Desired ending Inventor 30% 6283 6115 6055 6055 9 Total quantity (kg) needed 23883 27059 26437 65141 10 Less: Beginning inventory of 20% 3520 4189 4076 3520 11 Quantity (kg) to purchase 20363 22870 22360 61621 12 x Cost per kg $2.25 $2.25 $2.25 $2.25 13 Total cost of DM purchases SA5,817.20 $51,457.05 $50,310.45 $138,646.35 14 AN 1 4 Prepare a cash payments budget for the direct material purchases 2 from Requirment 3 3 4 Cash Payments for Direct Material Purchases Budget 5 January February March Quarter 6 December purchases (from Accounts Payable 42240 42240 7 January purchases 9163.44 36653.76 45817.2 8 February purchases 10291.41 41165.64 51457.05 9 March purchases 10062.09 10062.09 10 Total cash payments for DM purchases 51403.44 98348.61 149576.3 149576.3 11 12 13 14 5 Perpare a cash payments budget for conversion 00515. 3 Cash Payments for Conversion Costs Budget 4 January February March Quarter 5 Variable $11,100.00 $13,089.58 $12,738.54 $36,928.13 6 Rent (fixed) $ 4,500.00 $ 4,500.00 $ 4,500.00 $13,500.00 7 Other fixed MOH $ 3,500.00 $ 3,500.00 $ 3,500.00 $10,500.00 8 Total payments for conversion costs $19,100.00 $21,089.58 $20,738.54 $60,928.13 9 0 1 $ 1.25 variable MOH per unit $4,500.00 Rent $3,500.00 Other fixed MOH 2 3 4 5 16 17 18 6 Prepare a cash payments budget for operating expenses Quarter Cash Payments for Direct Material Purchases Budget January February March Variable operating expenses Fixed operating expenses Total payments for operating expenses 0 1 2 14 IS 16 7 8 9 O Quarter 9 2 3 Combined Cash Budget 4 January February March S Cash balance, beginning 6 Add cash collections 7 Total cash available 8 Less cash payments Direct material purchases 10 Conversion costs 11 Operating expenses 12 Equipment purchases 13 Tax payment 14 Total disbursements 15 Ending cash balance before financing 16 Financing: 17 Borrowings 18 Repayments 19 Interest payments 20 Total financing 21 Cash balance, ending 22