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7. Prepare Cash Budget

WACC1103 Test 3 2020-20 Project V2 Q Search in Document Home Insert Draw Design Layout References Mailings Review View + Share TT A AaBbCcDdEe AaBbCcDdEe Times New R... 12 A- A A . BIU Uabe X2 x2 A A A AaBbCcDc AaBbCcDdEe AaBb 1 Paste Normal No Spacing Heading 1 Heading 2 Title Styles Sensitivity Pane m. Equipment costing $105,000 will be purchased in April. n. Dividends of $60,000 will be declared and paid in May & $200,000 paid in June. o. The company paid the following expenses: May June Expenses Manufacturing Overhead Selling Expenses Administrative expenses February $86,000 $70,000 $53,000 $ March $97,000 $55,000 $57,000 April $86,000 $67,000 $59,000 $75,000 $59,000 $52,000 $ 74,000 $68,000 $50,000 $ July $72,000 $63,000 $77,000 p. The company must maintain a cash balance of at least $60,000 at the end of each month. 4. The company has an agreement with a local bank that allows it to borrow at the beginning of each month. The interest rate on these loans is 12% per year. The company would repay the loan plus accumulated interest at the end of the month. Required: 1. Prepare a sales budget, by month and in total, from February to July (5 marks) 2. Prepare a schedule of expected cash collections, by month and in total, from February to July. (15 marks) ) 3. Prepare a production budget for each months from February to July. (10 marks) 4. Prepare a direct materials budget, by month and in total, from February to July (16 marks) 5. Prepare a schedule of expected cash disbursements for direct materials purchase, by month and in total, from February to July (14 marks) 6. Prepare direct Labor Budget (10 marks) 7. Prepare Cash Budget (25 marks) Cover Page, Introduction and formatting (Smarks) 1. Cover page 2. Table of contents 3. Formatting Grand Total (100 Marks) Page 3 of 3 4 of 524 words X English (United States) 0 Focus E E + 92% WACC1103 Test 3 2020-20 Project V2 Q Search in Document Home Insert Draw Design Layout References Mailings Review View + Share Times New R... , - 12 A- A A 3 A+ AaBbCcDdEe AaBbCcDdEe AaBbCcDc AabbCcDdEe AaBbc 1 Paste BIU abe X, x2 A Normal No Spacing Heading 1 Heading 2 Title Styles Sensitivity Pane Version 1 The data below pertains to the following months of Rama Fashions Company. Below is the estimated sales (in units): February 70000 March 60000 April 50000 May 65000 June 70000 July 80000 Aug 50000 Sept 40000 a. The selling price per unit is $35. b. All sales are on account. Based on past experience, sales are collected in the following pattern: Month of sale Month following sale 25% 75% c. Account Receivable of February totaled $300,000. d. The company desires the ending Inventory of production unit be equal to 30% of next month's sales. The ending production unit Inventory of Jan was 7000. c. Each unit requires 6 grams of direct raw materials. f. The company requires that the ending inventory of direct raw materials be equal to 25% of next month's production needs. The Ending DM inventory of Jan was 73000 g. The direct raw material costs $3 per grams. h. 20% of a month's purchases of raw materials is paid for in the month of purchase; the remainder is paid for in the following month. i. The accounts payable on February was $205,000. j. Each unit requires 0.4 hours of direct Labor. k. The direct labor costs $13 per hour. 1. The beginning Cash Balance of February was $46,000 Page 2 of 3 4 of 524 words X English (United States) 0 Focus E E + 92% WACC1103 Test 3 2020-20 Project V2 Q Search in Document Home Insert Draw Design Layout References Mailings Review View + Share TT A AaBbCcDdEe AaBbCcDdEe Times New R... 12 A- A A . BIU Uabe X2 x2 A A A AaBbCcDc AaBbCcDdEe AaBb 1 Paste Normal No Spacing Heading 1 Heading 2 Title Styles Sensitivity Pane m. Equipment costing $105,000 will be purchased in April. n. Dividends of $60,000 will be declared and paid in May & $200,000 paid in June. o. The company paid the following expenses: May June Expenses Manufacturing Overhead Selling Expenses Administrative expenses February $86,000 $70,000 $53,000 $ March $97,000 $55,000 $57,000 April $86,000 $67,000 $59,000 $75,000 $59,000 $52,000 $ 74,000 $68,000 $50,000 $ July $72,000 $63,000 $77,000 p. The company must maintain a cash balance of at least $60,000 at the end of each month. 4. The company has an agreement with a local bank that allows it to borrow at the beginning of each month. The interest rate on these loans is 12% per year. The company would repay the loan plus accumulated interest at the end of the month. Required: 1. Prepare a sales budget, by month and in total, from February to July (5 marks) 2. Prepare a schedule of expected cash collections, by month and in total, from February to July. (15 marks) ) 3. Prepare a production budget for each months from February to July. (10 marks) 4. Prepare a direct materials budget, by month and in total, from February to July (16 marks) 5. Prepare a schedule of expected cash disbursements for direct materials purchase, by month and in total, from February to July (14 marks) 6. Prepare direct Labor Budget (10 marks) 7. Prepare Cash Budget (25 marks) Cover Page, Introduction and formatting (Smarks) 1. Cover page 2. Table of contents 3. Formatting Grand Total (100 Marks) Page 3 of 3 4 of 524 words X English (United States) 0 Focus E E + 92% WACC1103 Test 3 2020-20 Project V2 Q Search in Document Home Insert Draw Design Layout References Mailings Review View + Share Times New R... , - 12 A- A A 3 A+ AaBbCcDdEe AaBbCcDdEe AaBbCcDc AabbCcDdEe AaBbc 1 Paste BIU abe X, x2 A Normal No Spacing Heading 1 Heading 2 Title Styles Sensitivity Pane Version 1 The data below pertains to the following months of Rama Fashions Company. Below is the estimated sales (in units): February 70000 March 60000 April 50000 May 65000 June 70000 July 80000 Aug 50000 Sept 40000 a. The selling price per unit is $35. b. All sales are on account. Based on past experience, sales are collected in the following pattern: Month of sale Month following sale 25% 75% c. Account Receivable of February totaled $300,000. d. The company desires the ending Inventory of production unit be equal to 30% of next month's sales. The ending production unit Inventory of Jan was 7000. c. Each unit requires 6 grams of direct raw materials. f. The company requires that the ending inventory of direct raw materials be equal to 25% of next month's production needs. The Ending DM inventory of Jan was 73000 g. The direct raw material costs $3 per grams. h. 20% of a month's purchases of raw materials is paid for in the month of purchase; the remainder is paid for in the following month. i. The accounts payable on February was $205,000. j. Each unit requires 0.4 hours of direct Labor. k. The direct labor costs $13 per hour. 1. The beginning Cash Balance of February was $46,000 Page 2 of 3 4 of 524 words X English (United States) 0 Focus E E + 92%