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:

September October November

Sales $$147,000$ $$175,000$ $$237,000$

Manufacturing costs $62,00075,00085,000$

Selling and administrative expenses $51,00053,00090,000$

Capital expenditures $\_\_57,000$

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 $$9,000$ 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 $$56,000,$ marketable securities of $$79,000,$ and accounts receivable of $$164,400($$$35,400$ from July sales and $$129,000$ from August sales$).$ Sales on account for July and August were $$118,000$ and $$129,000,$ respectively. Current liabilities as of September $1$ include $$9,000$ 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 $$21,000$ will be made in October. Bridgeport$$s regular quarterly dividend of $$9,000$ is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $$55,000.$

Required:

Question Content Area

$1.$ Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume $360$ days per year for interest calculations.

Bridgeport Housewares Inc.

Cash Budget

For the Three Months Ending November $30$

September October November

Estimated cash receipts from:

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$$-$ Select $-$

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Total cash receipts $fill in the blank

$fill in the blank

$fill in the blank

Less estimated cash payments for:

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$$-$ Select $-$

$$-$ Select $-$

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Other purposes:

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Total cash payments $fill in the blank

$fill in the blank

$fill in the blank

$$-$ Select $-$

$$-$ Select $-$

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Cash balance at end of month $fill in the blank

$fill in the blank

$fill in the blank

$-$ Select $-$

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Excess or $($deficiency$)$ $fill in the blank

$fill in the blank

$fill in the blank

Question Content Area

$2.$ On the basis of the cash budget prepared in part $(1),$ what recommendation should be made to the controller?

The budget indicates that the minimum cash balance

be maintained in November. This situation can be corrected by

and$/$or by the

of the marketable securities$,$ if they are held for such purposes. At the end of September and October, the cash balance will

the minimum desired balance.