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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
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 $ $ $ Manufacturing costs Selling and administrative expenses Capital expenditures The company expects to sell about of its merchandise for cash. Of sales on account, 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 $ 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, 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 include cash of $ marketable securities of $ and accounts receivable of $$ from July sales and $ from August sales Sales on account for July and August were $ and $ respectively. Current liabilities as of September include $ 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 $ will be made in October. Bridgeports regular quarterly dividend of $ is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $ Required: Question Content Area Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume days per year for interest calculations. Bridgeport Housewares Inc. Cash Budget For the Three Months Ending November Line Item Description September October November Estimated cash receipts from: $Cash sales $Cash sales $Cash sales Collection of accounts receivable Collection of accounts receivable Collection of accounts receivable Total cash receipts $Total cash receipts $Total cash receipts $Total cash receipts Less estimated cash payments for: $Manufacturing costs $Manufacturing costs $Manufacturing costs Selling and administrative expenses Selling and administrative expenses Selling and administrative expenses Capital expenditures Other purposes: Income tax Dividends Total cash payments $Total cash payments $Total cash payments $Total cash payments $Cash increase or decrease $Cash increase or decrease Cash increase or decrease Plus cash balance at beginning of month Plus cash balance at beginning of month Plus cash balance at beginning of month Cash balance at end of month $Cash balance at end of month $Cash balance at end of month $Cash balance at end of month Less minimum cash balance Less minimum cash balance Less minimum cash balance Excess or deficiency $Excess or deficiency $Excess or deficiency $Excess or deficiency Question Content Area On the basis of the cash budget prepared in part what recommendation should be made to the controller? The budget indicates that the minimum cash balance fill in the blank of be maintained in November. This situation can be corrected by fill in the blank of andor by the fill in the blank of of the marketable securities if they are held for such purposes. At the end of September and October, the cash balance will fill in the blank of the minimum desired balance.
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 $ $ $
Manufacturing costs
Selling and administrative expenses
Capital expenditures
The company expects to sell about of its merchandise for cash. Of sales on account, 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 $ 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, 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 include cash of $ marketable securities of $ and accounts receivable of $$ from July sales and $ from August sales Sales on account for July and August were $ and $ respectively. Current liabilities as of September include $ 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 $ will be made in October. Bridgeports regular quarterly dividend of $ is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $
Required:
Question Content Area
Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume days per year for interest calculations.
Bridgeport Housewares Inc.
Cash Budget
For the Three Months Ending November
Line Item Description September October November
Estimated cash receipts from:
$Cash sales $Cash sales $Cash sales
Collection of accounts receivable Collection of accounts receivable Collection of accounts receivable
Total cash receipts $Total cash receipts $Total cash receipts $Total cash receipts
Less estimated cash payments for:
$Manufacturing costs $Manufacturing costs $Manufacturing costs
Selling and administrative expenses Selling and administrative expenses Selling and administrative expenses
Capital expenditures
Other purposes:
Income tax
Dividends
Total cash payments $Total cash payments $Total cash payments $Total cash payments
$Cash increase or decrease $Cash increase or decrease Cash increase or decrease
Plus cash balance at beginning of month Plus cash balance at beginning of month Plus cash balance at beginning of month
Cash balance at end of month $Cash balance at end of month $Cash balance at end of month $Cash balance at end of month
Less minimum cash balance Less minimum cash balance Less minimum cash balance
Excess or deficiency $Excess or deficiency $Excess or deficiency $Excess or deficiency
Question Content Area
On the basis of the cash budget prepared in part what recommendation should be made to the controller?
The budget indicates that the minimum cash balance fill in the blank of
be maintained in November. This situation can be corrected by fill in the blank of
andor by the fill in the blank of
of the marketable securities if they are held for such purposes. At the end of September and October, the cash balance will fill in the blank of
the minimum desired balance.
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