Prepare the cash budget for hughes for the first 6 months of 2013 on the basis of the following estimates:

1. Credit sales are expected to be 20,000 a month from December 2012 to June 2013.

2. Monthly credit purchases of raw materials are expected to be 10,000 from December to June.

3. Accounts Receivable are collected in the month following the sales. Payments for raw materials are also made in the month following when the costs are incurred.

4. Wages and salaries used in the production process are expected to be 3000 each month, paid in the month they are incurred; factory overhead is 1000 a month, selling expenses are 1500 each month, and monthly administrative expenses are 500.

5. The company's capital budget calls for the purchase of a new machine costing 10,000 whose payment is expected to be made in May. income tax of 5000 is due in march, divident payments of 10,000 are planned in march.and semiannunual interst of 1000 of 20000 of 10 percent bonds are due in June.

6. The company has a cash balance of 10,000 on December 31,2012. This amount is the minimum cash balance which should be maintained throughout the budget period.

Answer rating: 100% (QA)

The cash budget is as shown below Jan13 Feb13 Mar13 Apr13 May13 Jun13 Cash Balance 1000000 1400000 1... View the full answer