to prepare & monthly cash budget for the next three months. You are presented with the following budget The controlier or Bhageport res Inc. information: September October November $116,000 $143,000 $188,000 Sales 49,000 Manufacturing costs 61,000 68,000 Selling and administrative 41,000 43,000 71,000 expenses 45,000 Capital expenditures 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 remaindem the following month (second month following sale). Depreciation, insurance, and property tax expense represent $10,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are pald in December. Of the remainder of the manufacturing costs, 80 % are expected to be paic in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of $44,000, marketable securities of $63,000, and accounts receivable of $129,900 ($102,000 from July sales and $27,900 from August sales). Sales on account for July and August were $93,000 and $102,000, respectively. Current liabilities as of September 1 indlude $10,000 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 $17,000 will be made in October. Bridgeport's regular quarterly dividend of $10,000 is expected to be declared in October and paid in November, Management desires to maintain a minimum cash balance of $43,000. Required: 1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Assume 360 days per year for interest calculations. Bridoeport Housewares Inc. Next Previous Check My Work 4 more Check My Work uses remaining. Submit Assignment for Gradir Save and Exit All work saved 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 recelpts from: Cash sales 11,600 14,300 18,800 Collection of accounts recelvable 100,200 X 85,360 X 96,320 X Total cash receipts Less estimated cash payments for Other purposes Total cash payments Cash balance at end of month Previous Check My Work 4 more Check My Work uses remaining N Y Check My Work The primarY s0urce of estimated cash receipts is from cash sales and collections on account. To estimate cash receipts from cash sales and collections on account, a schedule of collections from sales is prepared. 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. Feedback T Check My Work Sometimes an item may be a decrease in one period and an increase in a different period. What weaknesses are shown by this cash budget? Feedback Y Check My Work