Lindor Enterprises projects sales for the first three months of the year to be: $10,400 in January, $12,500 in February, and $13,100 in March. Cash receipts are expected to be: $8,580 in January, $11,820 in February, and $12,700 in March. They anticipate the following cash payments: Lindor Enterprises January February March Direct materials purchased $3,600 $4,200 $4,700 Direct labor costs $3,300 $4,000 $3,500 Depreciation on plant $570 $570 $570 Utilities for plant $650 $650 $650 Property taxes on plant $170 $170 $170 Depreciation on office $580 $580 $580 Utilities for office $350 $350 $350 Property taxes on office $180 $180 $180 Office salaries $3,000 $3,000 $3,000   All costs are paid in the month incurred except: direct materials, which are paid in the month following the purchase; utilities, which are paid in the month after incurred; and property taxes, which are prepaid for the year on January 2. The Accounts Payable and Utilities Payable accounts have a zero balance on January 1. Also, Lindor Enterprises beginning cash balance is $3,100 and they desire to maintain a minimum ending cash balance of $3,100. Lindor Enterprises borrows cash as needed at the beginning of each month in increments of $900 and repays the amounts borrowed in increments of $900 at the beginning of months when excess cash is available. The interest rate on borrowed amounts is 5% per year. Interest is paid at the beginning of the month on the outstanding balance from the previous month. Complete a Cash Budget for Lindor Enterprises. Lindor EnterprisesCash BudgetFor the Quarter Ending March 31   January February March Total Beginning cash balance         Cash receipts         Cash available         Cash payments:         Purchases of direct materials         Direct labor         Manufacturing overhead         Selling and administrative expenses         Interest expense         Total cash payments         Ending cash balance before financing         Minimum cash balance desired         Projected cash excess (deficiency)         Financing:         Borrowing         Principal repayments         Total effects of financing         Ending cash balance

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Lindor Enterprises projects sales for the first three months of the year to be: $10,400 in January, $12,500 in February, and $13,100 in March. Cash receipts are expected to be: $8,580 in January, $11,820 in February, and $12,700 in March.

They anticipate the following cash payments:

Lindor Enterprises January February March
Direct materials purchased $3,600 $4,200 $4,700
Direct labor costs $3,300 $4,000 $3,500
Depreciation on plant $570 $570 $570
Utilities for plant $650 $650 $650
Property taxes on plant $170 $170 $170
Depreciation on office $580 $580 $580
Utilities for office $350 $350 $350
Property taxes on office $180 $180 $180
Office salaries $3,000 $3,000 $3,000

 

All costs are paid in the month incurred except: direct materials, which are paid in the month following the purchase; utilities, which are paid in the month after incurred; and property taxes, which are prepaid for the year on January 2. The Accounts Payable and Utilities Payable accounts have a zero balance on January 1.

Also, Lindor Enterprises beginning cash balance is $3,100 and they desire to maintain a minimum ending cash balance of $3,100. Lindor Enterprises borrows cash as needed at the beginning of each month in increments of $900 and repays the amounts borrowed in increments of $900 at the beginning of months when excess cash is available. The interest rate on borrowed amounts is 5% per year. Interest is paid at the beginning of the month on the outstanding balance from the previous month.

Complete a Cash Budget for Lindor Enterprises.

Lindor EnterprisesCash BudgetFor the Quarter Ending March 31
  January February March Total
Beginning cash balance        
Cash receipts        
Cash available        
Cash payments:        
Purchases of direct materials        
Direct labor        
Manufacturing overhead        
Selling and administrative expenses        
Interest expense        
Total cash payments        
Ending cash balance before financing        
Minimum cash balance desired        
Projected cash excess (deficiency)        
Financing:        
Borrowing        
Principal repayments        
Total effects of financing        
Ending cash balance        
 
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