Question
The treasurer of Unisyms Company has accumulated the following budget information for the first two months of the coming year: March April Sales $450,000 $520,000
The treasurer of Unisyms Company has accumulated the following budget information for the first two months of the coming year:
| March | April | |
| Sales | $450,000 | $520,000 |
| Manufacturing costs | 290,000 | 350,000 |
| Selling and administrative expenses | 41,400 | 46,400 |
| Capital additions | 250,000 | -- |
The company expects to sell about 35% of its merchandise for cash. Of sales on account, 80% are expected to be collected in full in the month of the sale and the remainder in the month following the sale. One-fourth of the manufacturing costs are expected to be paid in the month in which they are incurred and the other three-fourths in the following month. Depreciation, insurance, and property taxes represent $6,400 of the probable monthly selling and administrative expenses. Insurance is paid in February, and a $40,000 installment on income taxes is expected to be paid in April. Of the remainder of the selling and administrative expenses, one-half are expected to be paid in the month in which they are incurred, with the balance paid in the following month. Capital additions of $250,000 are expected to be paid in March.
Current assets as of March 1 are composed of cash of $45,000 and accounts receivable of $51,000. Current liabilities as of March 1 are composed of accounts payable of $121,500 ($102,000 for materials purchases and $19,500 for operating expenses). Management desires to maintain a minimum cash balance of $20,000.
Prepare a monthly cash budget for March and April.
| Unisyms Company | ||
| Cash Budget | ||
| For the Two Months Ending April 30, 20XX | ||
| March | April | |
| Estimated cash receipts from: | ||
| $fill in the blank 2 | $fill in the blank 3 | |
| fill in the blank 5 | fill in the blank 6 | |
| Total cash receipts | $fill in the blank 7 | $fill in the blank 8 |
| Estimated cash payments for: | ||
| $fill in the blank 10 | $fill in the blank 11 | |
| fill in the blank 13 | fill in the blank 14 | |
| fill in the blank 16 | ||
| fill in the blank 18 | ||
| Total cash payments | $fill in the blank 19 | $fill in the blank 20 |
| $fill in the blank 22 | $fill in the blank 23 | |
| fill in the blank 25 | fill in the blank 26 | |
| $fill in the blank 28 | $fill in the blank 29 | |
| fill in the blank 31 | fill in the blank 32 | |
| $fill in the blank 34 | $fill in the blank 35 | |
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