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Ch 22 14. H.W: Budgeting You are provided with the following Sales Budget, Purchases Budget and selling and administrative expenses budget for Aquamarine Gulf Co. for the first quarter of the year 2020. (1) Sles Budget Jan. 12,000 24,000 36,000 Cash sales Credit sales Total sales Feb. 15,000 30,000 45,000 Mar. 18,000 36,000 54,000 Requirement 1 Cash receipt from customer's Budget Jan. Feb. Mar. Total Jan. Collections: From Jan. Sales From Dec. Sales Total Jan. collection Feb. Collections: From Feb. Sales From Jan. Sales Total Feb. collections Mar. Collections: From Mar. Sales From Feb. Sales Total Mar, collections Total cash receipt Total 45,000 90,000 135,000 anPurchase Budget Cash Purchases Credit Purchases Total Purchases Jan. 4,000 2,000 6,000 Feb. 6,000 3,000 9,000 Mar. 8,000 4,000 12,000 Total 18,000 9,000 27,000 Mar. Total (III)Sales& Administrative Expenses Budget Jan. 4,000 2,400 Feb. 4,500 Mar. Total 4,300 12,800 2,700 7,900 2,800 Salaries Sales Commissions Rent Maintenance Insurance Utilities Depreciation Total Requirement 2 purchase payment Budget Jan. Feb. Jan. pureh. Payments: For Jan. Purch. For Dec. Purch. Total Jan. Purc. Pay. Feb. purch. Payments: For Feb. Purch. For Jan. Purch. Total Feb. Purch. Pay. Mar. purch. Payments: For Mar, Purh. For Feb. Purch Total Mar Purch. Pay. Total Purchase Payments 1,500 1,800 50 200 300 10,250 1,500 1,500 4,500 1,750 2,000 5,550 50 50 150 200 200 600 300 300 900 11,100 11,050 32,400 Requirement 3 Cash Budget Jan. Feb. Mar. Total Requirements: Assuming Aquamarine is planning to purchase new office equipment for $25,000 during Jan.2020. and assuming all cash expenses are paid when incurred except insurance expenses which is an expiration of prepaid. Prepare the following budgets for the first quarter of the year 2020: Beginning cash balance Cash receipts Cash available Cash payments: For Purchases For S & Adm. Exp.** For Additional Assets Total cash payments Cash balance before financing Minimum cash condition Cash Excess (Shortage) Financing 1-Collections from customers budget Assume all credit sales will be collected during the following month of sale. (Accounts Receivable at dec.31 2019 expected to be $20,000) 2- Payments for purchases budget Assume all credit purchases will be paid during the following month of purchases (Accounts Payable at dec.31 2019 is expected to be $1,900) 3- Cash budget assume the company wishes to maintain a minimum cash balance of $ 30,000 at the end of each month. To maintain the minimum cash balance, the company can borrow from the bank in $1,000 increments at %5 interest and the company should payback borrowed money when there an excess cash balance. (Cash balance at dec.31 2019 is expected to be $33,000) Borrowing Principle payment Interest Payment Financing Effect Ending Cash Balance * Ending Cash march 31 (from the balance sheet) ** Total expenses Less noncash expenses