FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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:
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 aCash Budget for Lindor Enterprises.
Lindor EnterprisesCash BudgetFor the Quarter Ending March 31
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 |
| $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
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 |
||||
| 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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