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:OctoberSeptemberOctober November$125,000 $154,000 $201,00053,000 66,00072,00076,00048,00044,000 46,000The 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 manufacturingcosts, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.SalesManufacturing costsSelling and administrative expensesCapital expendituresCurrent assets as of September 1 include cash of $48,000, marketable securities of $68,000, and accounts receivable of $139,000 ($30,000 from July sales and $109,000 from August sales). Sales on account for July and August were $100,000 and$109,000, respectively. Current liabilities as of September 1 include $5,000 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 incometax payment of $18,000 will be made in October. Bridgeport's regular quarterly dividend of $6,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $47,000.Required:1. Prepare a monty cash budget and supporting schedules for September, October, and November. Assume 360 days per year for interest calculations.Bridgeport Housewares Inc.Cash BudgetFor the Three Months Ending November 30Line Item DescriptionEstimated cash receipts from:Cash sales- VCollection of accounts receivableTotal cash receiptsLess estimated cash payments for:Manufacturing costs -✓Selling and administrative expenses.✓Capital expendituresOther purposes:Income taxDividends✓✓Total cash paymentsCash increase or (decrease)Plus cash balance at beginning of monthCash balance at end of monthLess minimum cash balanceExcess or (deficiency)✓✓September✓106,300 ✓12.500OctoberNovember15,400300 00 0300 000 0000000

The cash budget is prepared for estimating the future cash inflow and cash outflow. The 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 $125,000 $154,000 53,000 66,000 44,000 46,000 Sales $201,000 72,000 76,000 48,000 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. Manufacturing costs Selling and administrative expenses Capital expenditures Current assets as of September 1 include cash of $48,000, marketable securities of $68,000, and accounts receivable of $139,000 ($30,000 from July sales and $109,000 from August sales). Sales on account for July and August were $100,000 and $109,000, respectively. Current labilities as of September 1 include $6,000 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 $18,000 will be made in October. Bridgeport's regular quarterly dividend of $6,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $47,000. $ Required: 1. Prepare a montity cash budget and supporting schedules for September, October, and November Assume 360 days per year for interest calculations

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q