Explanation The computation of missing amounts for April is calculated step by step as below: 1. Collections from customers: Given, Beginning cash balance for April: $26 Total cash available: $94 Collections from customers= Total cash available-Beginning cash balance Collections from customers= $94-$26 Collections from customers= $68 2. Disbursements for April: Total disbursements for second quarter: $304 May Disbursement: $108 June Disbursement: $82 April Disbursement=Total disbursements for second quarter-May disbursement-June disbursement April Disbursement= $304-$108-$82 April Disbursement= $114 3. Purchases of inventory: Operating expenses: $30 Capital Additions: $34 Payment of Dividends: $0 Total disbursements for April= $114 (Calculated as above) So Purchases in this scenario is computed by: Purchases= Total disbursements for April − [Operating expenses + Capital Additions + Payment of Dividends] Purchases= $114-[$30+$34+$0] Purchases for April= $50 4. Borrowings: The borrowings for the month of April is: Excess (deficiency) of cash available over disbursements: $(20) Ending Cash balance: $30 Repayments: $0 Ending cash balance=Deficiency of cash available over disbursements+Borrowings+ Repayments $30=$(20) + Borrowings + $0 Borrowings= $30+$20 Borrowings= $50 Note: Ending cash balance is $30 The minimum cash balance requirement to start each month is $30. Since the ending balance of prior month will be the opening balance of next month, $30 is considered to be the ending cash balance for April month. The computation of missing amounts for May is calculated step by step as below: 1. Opening cash balance: The minimum requirement of cash balance of $30 is taken as the opening cash balance for the month of May. 2. Total cash available for May = Cash balance beginning + Collections from customers Total cash available for May= $30+$108 Total cash available for May= $138 3. Operating Expenses: Given, Purchase of inventory: $60 Capital additions: $8 Total disbursements for May: $108 Operating Expenses= $108-$60-$8 Operating Expenses for May= $40 4. Excess or (deficiency) of cash available over disbursements: Total cash available for May: $138 Total disbursements for May: $108 Excess or (deficiency) of cash available over disbursements: $138-$108 Excess of cash available over disbursements= $30 The computation of missing amounts for June is calculated step by step as below: 1. Opening cash balance: The ending cash balance of $30 for May will be the opening cash balance of June...

11th Edition

ISBN: 9781259535314

Author: David Marshall, Wayne William McManus, Daniel Viele

Publisher: McGraw-Hill Education

See similar textbooks

Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It…

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future…

Videos

Question

Chapter 14, Problem 14.21P

To determine

Cash Budget: The plan or estimation of cash inflows or receipts and cash outflows or disbursements of the company over a specific time period refers to cash budget. Cash budget is prepared to assess the capacity of the company to operate with the available cash balances.

To Calculate:

The missing amounts in the cash budget of Morrison Mfg. Co. for the second quarter of the year 2016 from using the given information.

Expert Solution & Answer

Chapter 14 Solutions

Accounting: What the Numbers Mean

Ch. 14 - Prob. 14.1ME Ch. 14 - Mini-Exercise 14.2 LO 4, LO 5 Purchases budget In...Ch. 14 - Mini-Exercise 14.3 LO 6 Operating expense budget...Ch. 14 - Mini-Exercise 14.4 LO 8 Cash receipts analysis In...Ch. 14 - Mini-Exercise 14.5 LO 8 Cash budget In addition to...Ch. 14 - Mini-Exercise 14.6 LO 10 Standard product cost In...Ch. 14 - Exercise 14.7 LO 4, 5 Production and purchases...Ch. 14 - Prob. 14.8E Ch. 14 - Prob. 14.9E Ch. 14 - Exercise 14.10 LO 4. 5 Production and purchases...

Ch. 14 - Exercise 14.11 LO 4, 8 Cash receipts budget Fox...Ch. 14 - Prob. 14.12E Ch. 14 - Prob. 14.13E Ch. 14 - Prob. 14.14E Ch. 14 - Exercise 14.15 LO 10, 11 Standard absorption cost...Ch. 14 - Prob. 14.16E Ch. 14 - Problem 14.17 LO 4, 5 Purchases budget Brooklyn...Ch. 14 - Problem 14.18 LO 4, 5 Purchases budget—analytical...Ch. 14 - Prob. 14.19P Ch. 14 - Prob. 14.20P Ch. 14 - Prob. 14.21P Ch. 14 - Prob. 14.22P Ch. 14 - Prob. 14.23P Ch. 14 - Prob. 14.24P Ch. 14 - Prob. 14.25C Ch. 14 - Case 14.26 Budget of the United States government:...Ch. 14 - Prob. 14.27C

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Recommended textbooks for you

FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education

FINANCIAL ACCOUNTING

Accounting

ISBN:9781259964947

Author:Libby

Publisher:MCG

Accounting

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:Cengage Learning,

Accounting Information Systems

Accounting

ISBN:9781337619202

Author:Hall, James A.

Publisher:Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis...

Accounting

ISBN:9780134475585

Author:Srikant M. Datar, Madhav V. Rajan

Publisher:PEARSON

Intermediate Accounting

Accounting

ISBN:9781259722660

Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:9781259726705

Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:McGraw-Hill Education

SEE MORE TEXTBOOKS

Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY