Snowmass, Inc., manufactures and sells snowboards. Snowmass manufactures a single model, the Pipex. In late 2020, Snowmass's management accountant gathered the following data to prepare budgets for January 2021: (Click the icon to view the budgeted balances and additional information pertaining to the cash budget.) (Click the icon to view the additional variable and fixed manufacturing cost information.) Requirement 1. Prepare a cash budget for January 2021. Show supporting schedules for the calculation of collection of receivabies and payments of accounta payable, and for diabursements for fixed manutacturing and operating (nonmanufacturing) overtwead. Begin by preparing the supporting schedule for the calculation of collection of receivables. Data table Budgeted balances at .lanlane 21 mo1 ara se fnllnwe' Selected budgeted information for December 2020 follows: Customer invoices are payable within 30 days. From past experience, Snowmass's accountant projects 25% of invoices will be collected in the month invoiced, and 75% will be collected in the following month. Accounts payable relates only to the purchase of direct materials. Direct materials are purchased on credit with 45% of direct materials purchases paid during the month of the purchase, and 55% paid in the month following purchase. Fixed manufacturing overhead costs include $11,000 of depreciation costs and fixed operating (nonmanufacturing) overhead costs include $6,000 of depreciation costs. Direct Data table Selected budgeted information for December 2020 follows: Customer invoices are payable within 30 days. From past experience, Snowmass's accountant projects 25% of invoices will be collected in the month invoiced, and 75% will be collected in the following month. Accounts payable relates only to the purchase of direct materials. Direct materials are purchased on credit with 45% of direct materials purchases paid during the month of the purchase, and 55% paid in the month following purchase. Fixed manufacturing overhead costs include $11,000 of depreciation costs and fixed operating (nonmanufacturing) overhead costs include $6,000 of depreciation costs. Direct manufacturing labor and the remaining manufacturing and operating (nonmanufacturing) overhead costs are paid monthly. All property, plant, and equipment acquired during January 2021 were purchased on credit and did not entail any outflow of cash. There were no borrowings or repayments with respect to long-term liabilities in January 2021. On December 15, 2020, Snowmass's board of directors voted to pay a $195,000 dividend to stockholders on January 31,2021 . Data table Snowmass' CEO expects to sell 1,300 snowboards during January 2021 at an estimated retail price of $650 per board. Further, the CEO expects 2021 beginning inventory of 600 snowboards and would like to end January 2021 with 600 snowboards in stock. Other data include: Data table Snowmass' CEO expects to sell 1,300 snowboards during January 2021 at an estimated retail price of $650 per board. Further, the CEO expects 2021 beginning inventory of 600 snowboards and would like to end January 2021 with 600 snowboards in stock. Other data include: The inventoriable unit cost for ending finished-goods inventory on December 31,2020 , is $250.00. Assume Snowmass uses a FIFO inventory method for both direct materials and finished goods. Ignore work in process in your calculations. Reference Requirements 1. Prepare a cash budget for January 2021. Show supporting schedules for the calculation of collection of receivables and payments of accounts payable, and for disbursements for fixed manufacturing and operating (nonmanufacturing) overhead. 2. Snowmass is interested in maintaining a minimum cash balance of $150,000 at the end of each month. Will Snowmass be in a position to pay the $195,000 dividend on January 31 ? 3. Why do Snowmass's managers prepare a cash budget in addition to the revenue, expenses, and operating income budget? 4. Prepare a budgeted balance sheet for January 31,2021 by calculating the January 31, 2021 balances in (a) cash (b) accounts receivable (c) inventory (d) accounts payable and (e) plugging in the balance for stockholders' equity. Requirement 1. Prepara a cash budget for January 2021. Show supporing schedules for the calculation of colection of receivabies and payments of accounts paratie, and for disbursements for foed manufacturing and operating (nonmanulacturing) Ovechead. Begin by prepanng the supporting schedule for the calculation of colection of roctivatios
