Bastille Corporation prepares monthly cash budgets. Here are the relevant data from operating...
Question:
Bastille Corporation prepares monthly cash budgets. Here are the relevant data from operating budgets for 2017.
| January | February | |
| Sales | $360,000 | $400,000 |
| Purchases | 120,000 | 130,000 |
| Salaries | 84,000 | 81,000 |
| Administrative expenses | 72,000 | 75,000 |
| Selling expenses | 79,000 | 88,000 |
All sales and purchases are on account. Budgeted collections and disbursement data are given below. All other expenses are paid in the month incurred except for administrative expenses, which include $1,000 of depreciation per month.
Other data:
1. Collections from customers: January $326,000; February $378,000.
2. Payments for purchases: January $110,000; February $135,000.
3. Other receipts: January: collection of December 31, 2016, notes receivable $15,000; February: proceeds from sale of securities $4,000.
4. Other disbursements: February $10,000 cash dividend.
The company s cash balance on January 1, 2017, is expected to be $46,000. The company wants to maintain a minimum cash balance of $40,000.
Prepare a cash budget for January and February.
Cash Budget
A cash budget refers to a budget that provides a proper summary of cash paid or received during particular months or quarters. The cash budget enables a company to better manage its cash.
Answer and Explanation: 1
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View this answer| Cash budget | ||
|---|---|---|
| January | February | |
| Beginning Cash | 46,000 | 42,000 |
| Add: | ||
| Collections from customers | 326,000 | 378,000 |
| Notes receivables | ... |
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Chapter 17 / Lesson 3See what cash budgets are, their purpose, and the importance of a cash budget in accounting. Learn how to prepare a cash budget and see cash budget examples.
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