Question 3

Novak Company prepares monthly cash budgets. Relevant data from operating budgets for 2017 are as follows:

January

February

Sales$426,240$473,600Direct materials purchases142,080148,000Direct labor106,560118,400Manufacturing overhead82,88088,800Selling and administrative expenses93,536100,640

All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,184of depreciation per month.

Other data:

1.Credit sales: November 2016, $296,000; December 2016, $378,880.2.Purchases of direct materials: December 2016, $118,400.3.Other receipts: JanuaryCollection of December 31, 2016, notes receivable $17,760;FebruaryProceeds from sale of securities $7,104.4.Other disbursements: FebruaryPayment of $7,104cash dividend.

The company's cash balance on January 1, 2017, is expected to be $71,040. The company wants to maintain a minimum cash balance of $59,200.

(a)

Your answer is correct.

Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.

Expected Collections from Customers

January

February

November$

$

December

January

February

Total collections$

$

Expected Payments for Direct Materials

January

February

December$

$

January

February

Total payments$

$

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Attempts: 4 of 10 used

(b)

Your answer is partially correct.Try again.

Display a cash budget for January and February in columnar form.(Do not leave any answer field blank. Enter 0 for amounts.)

NOVAKCOMPANY

Cash Budget

For the Two Months Ending February 28, 2017

For the Quarter Ending February 28, 2017

February 28, 2017

January

February

Repayments

Total Disbursements

Beginning Cash Balance

Financing

Sale of Securities

Selling and Administrative Expenses

Direct Materials

Receipts

Manufacturing Overhead

Notes Receivable

Total Receipts

Direct Labor

Excess (Deficiency) of Available Cash Over Cash Disbursements

Total Available Cash

Cash Dividend

Borrowings

Collections from Customers

Disbursements

Ending Cash Balance

$

$

Add

Less

:

Collections from Customers

Direct Labor

Direct Materials

Beginning Cash Balance

Disbursements

Sale of Securities

Ending Cash Balance

Selling and Administrative Expenses

Borrowings

Total Available Cash

Excess (Deficiency) of Available Cash Over Cash Disbursements

Receipts

Financing

Repayments

Manufacturing Overhead

Notes Receivable

Total Disbursements

Total Receipts

Cash Dividend

Disbursements

Manufacturing Overhead

Total Available Cash

Notes Receivable

Receipts

Sale of Securities

Direct Materials

Repayments

Collections from Customers

Ending Cash Balance

Excess (Deficiency) of Available Cash Over Cash Disbursements

Cash Dividend

Total Disbursements

Direct Labor

Selling and Administrative Expenses

Total Receipts

Financing

Beginning Cash Balance

Borrowings

Excess (Deficiency) of Available Cash Over Cash Disbursements

Collections from Customers

Repayments

Direct Labor

Selling and Administrative Expenses

Cash Dividend

Ending Cash Balance

Beginning Cash Balance

Borrowings

Direct Materials

Total Receipts

Sale of Securities

Disbursements

Financing

Manufacturing Overhead

Notes Receivable

Receipts

Total Available Cash

Total Disbursements

Receipts

Borrowings

Direct Materials

Disbursements

Financing

Excess (Deficiency) of Available Cash Over Cash Disbursements

Beginning Cash Balance

Total Receipts

Cash Dividend

Ending Cash Balance

Total Available Cash

Manufacturing Overhead

Notes Receivable

Collections from Customers

Repayments

Direct Labor

Sale of Securities

Selling and Administrative Expenses

Total Disbursements

Direct Labor

Repayments

Collections from Customers

Direct Materials

Receipts

Beginning Cash Balance

Borrowings

Sale of Securities

Disbursements

Selling and Administrative Expenses

Excess (Deficiency) of Available Cash Over Cash Disbursements

Ending Cash Balance

Cash Dividend

Total Disbursements

Total Available Cash

Financing

Manufacturing Overhead

Notes Receivable

Total Receipts

Total Available Cash

Direct Materials

Repayments

Collections from Customers

Beginning Cash Balance

Disbursements

Total Receipts

Excess (Deficiency) of Available Cash Over Cash Disbursements

Financing

Sale of Securities

Total Disbursements

Cash Dividend

Borrowings

Direct Labor

Notes Receivable

Ending Cash Balance

Receipts

Manufacturing Overhead

Selling and Administrative Expenses

Add

Less

:

Manufacturing Overhead

Direct Labor

Repayments

Total Disbursements

Selling and Administrative Expenses

Sale of Securities

Direct Materials

Ending Cash Balance

Cash Dividend

Total Available Cash

Borrowings

Total Receipts

Collections from Customers

Beginning Cash Balance

Disbursements

Excess (Deficiency) of Available Cash Over Cash Disbursements

Financing

Notes Receivable

Receipts

Direct Materials

Excess (Deficiency) of Available Cash Over Cash Disbursements

Sale of Securities

Selling and Administrative Expenses

Total Receipts

Disbursements

Ending Cash Balance

Beginning Cash Balance

Borrowings

Repayments

Financing

Total Available Cash

Total Disbursements

Manufacturing Overhead

Collections from Customers

Notes Receivable

Cash Dividend

Direct Labor

Receipts

Collections from Customers

Direct Labor

Disbursements

Ending Cash Balance

Total Receipts

Direct Materials

Total Disbursements

Excess (Deficiency) of Available Cash Over Cash Disbursements

Total Available Cash

Cash Dividend

Beginning Cash Balance

Financing

Manufacturing Overhead

Notes Receivable

Receipts

Borrowings

Repayments

Sale of Securities

Selling and Administrative Expenses

Receipts

Excess (Deficiency) of Available Cash Over Cash Disbursements

Manufacturing Overhead

Total Receipts

Disbursements

Total Available Cash

Collections from Customers

Financing

Notes Receivable

Direct Materials

Beginning Cash Balance

Cash Dividend

Selling and Administrative Expenses

Borrowings

Ending Cash Balance

Repayments

Sale of Securities

Total Disbursements

Direct Labor

Repayments

Total Available Cash

Beginning Cash Balance

Disbursements

Direct Labor

Direct Materials

Total Disbursements

Receipts

Ending Cash Balance

Sale of Securities

Excess (Deficiency) of Available Cash Over Cash Disbursements

Collections from Customers

Borrowings

Financing

Manufacturing Overhead

Total Receipts

Selling and Administrative Expenses

Notes Receivable

Cash Dividend

Manufacturing Overhead

Excess (Deficiency) of Available Cash Over Cash Disbursements

Repayments

Total Available Cash

Financing

Direct Labor

Cash Dividend

Direct Materials

Disbursements

Notes Receivable

Receipts

Sale of Securities

Selling and Administrative Expenses

Collections from Customers

Ending Cash Balance

Total Disbursements

Beginning Cash Balance

Total Receipts

Borrowings

Selling and Administrative Expenses

Manufacturing Overhead

Notes Receivable

Receipts

Disbursements

Repayments

Borrowings

Ending Cash Balance

Sale of Securities

Total Available Cash

Total Disbursements

Cash Dividend

Direct Materials

Excess (Deficiency) of Available Cash Over Cash Disbursements

Collections from Customers

Financing

Total Receipts

Beginning Cash Balance

Direct Labor

Total Disbursements

Sale of Securities

Ending Cash Balance

Manufacturing Overhead

Notes Receivable

Cash Dividend

Excess (Deficiency) of Available Cash Over Cash Disbursements

Direct Materials

Receipts

Collections from Customers

Financing

Selling and Administrative Expenses

Repayments

Beginning Cash Balance

Direct Labor

Total Available Cash

Total Receipts

Disbursements

Borrowings

Excess (Deficiency) of Available Cash Over Cash Disbursements

Direct Materials

Selling and Administrative Expenses

Financing

Borrowings

Collections from Customers

Direct Labor

Total Receipts

Cash Dividend

Total Available Cash

Disbursements

Beginning Cash Balance

Repayments

Receipts

Manufacturing Overhead

Ending Cash Balance

Sale of Securities

Notes Receivable

Total Disbursements

Add

Less

:

Manufacturing Overhead

Total Disbursements

Selling and Administrative Expenses

Total Available Cash

Sale of Securities

Direct Materials

Disbursements

Notes Receivable

Receipts

Financing

Direct Labor

Repayments

Collections from Customers

Total Receipts

Ending Cash Balance

Beginning Cash Balance

Excess (Deficiency) of Available Cash Over Cash Disbursements

Cash Dividend

Borrowings

Add

Less

:

Collections from Customers

Direct Labor

Selling and Administrative Expenses

Beginning Cash Balance

Excess (Deficiency) of Available Cash Over Cash Disbursements

Sale of Securities

Total Available Cash

Direct Materials

Manufacturing Overhead

Disbursements

Notes Receivable

Receipts

Borrowings

Repayments

Ending Cash Balance

Financing

Total Disbursements

Total Receipts

Cash Dividend

Borrowings

Notes Receivable

Sale of Securities

Disbursements

Collections from Customers

Direct Labor

Repayments

Total Available Cash

Ending Cash Balance

Selling and Administrative Expenses

Beginning Cash Balance

Direct Materials

Financing

Total Receipts

Excess (Deficiency) of Available Cash Over Cash Disbursements

Manufacturing Overhead

Receipts

Cash Dividend

Total Disbursements

$

$