Required:

Prepare a monthly cash budget and supporting schedules for September, October, and November.

Bridgeport Housewares Inc.

Cash Budget

For the Three Months Ending November $30$Cash budget

The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

Line Item Description September October November

Sales $$250,000$ $$300,000$ $$315,000$

Manufacturing costs $150,000180,000185,000$

Selling and administrative expenses $42,00048,00051,000$

Capital expenditures $200,000$

The company expects to sell about $10\%$ of its merchandise for cash. Of sales on account, $70\%$ are expected to be collected in the month following the sale and the remainder the following month $($second month following sale$).$ Depreciation, insurance, and property tax expense represent $$50,000$ of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, $80\%$ are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of September $1$ include cash of $$40,000,$ marketable securities of $$75,000,$ and accounts receivable of $$300,000($$$60,000$ from July sales and $$240,000$ from August sales$).$ Sales on account for July and August were $$200,000$ and $$240,000,$ respectively. Current liabilities as of September $1$ include $$40,000$ of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $$55,000$ will be made in October. Bridgeport$$s regular quarterly dividend of $$25,000$ is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $$50,000.$