Cash budget 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 $137,000 $167,000 $232,000 58,000 72,000 84,000 48,000 50,000 88,000 56,000 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 $8,000 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. Sales Manufacturing costs Selling and administrative expenses Capital expenditures Current assets as of September 1 include cash of $52,000, marketable securities of $74,000, and accounts receivable of $153,000 ($33,000 from July sales and $120,000 from August sales). Sales on account for July and August were $110,000 and $120,000, respectively. Current liabilities as of September 1 include $8,000 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 $20,000 will be made in October. Bridgeport's regular quarterly dividend of $8,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $51,000. Required: Show Transcribed Text Line Item Description Estimated cash receipts from: 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 Total cash receipts Less estimated cash payments for: Other purposes: Total cash payments Cash balance at end of month Excess or (deficiency) Show Transcribed Text 3 September October November DU 0 C 3 C 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 of the marketable securities, if they are held for such purposes. At the end of September and October, the cash balance will minimum desired balance. and/or by the the

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: October September October November $125,000 $154,000 $201,000 53,000 66,000 72,000 76,000 48,000 44,000 46,000 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 $6,000 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. Sales Manufacturing costs Selling and administrative expenses Capital expenditures Current assets as of September 1 include…

Cash Budget Wilson's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows: Month Sales Revenue Month Sales Revenue $300,000 March 245,000 April $200,000 155,000 January February All sales are on credit; 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 70 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total $40,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $30,000. Prepare monthly cash budgets for February, March, and April. Use negative signs only with beginning and ending cash balances, when appropriate. Do not use negative signs with disbursement answers. Wilson's Retail Company Cash Budgets February, March, and April February March Cash balance, beginning $ Total Cash receipts Cash available Total disbursements Cash balance, ending…

Preparing a Cash Budget La Famiglia Pizzeria provided the following information for the month of October: Sales are budgeted to be $158,000. About 85% of sales is cash; the remainder is on account. La Famiglia expects that, on average, 70% of credit sales will be paid in the month of sale, and 28% will be paid in the following month. Food and supplies purchases, all on account, are expected to be $106,000. La Famiglia pays 25% in the month of purchase and 75% in the month following purchase. Most of the work is done by the owners, who typically withdraw $6,000 a month from the business as their salary. (Note: The $6,000 is a payment in total to the two owners, not per person.) Various part-time workers cost $7,300 per month. They are paid for their work weekly, so on average 90% of their wages are paid in the month incurred and the remaining 10% in the next month. Utilities average $5,950 per month. Rent on the building is $4,100 per month. Insurance is paid quarterly; the next…