Question

Nadia Company expects to have a cash balance of $44,800 on January 1, 2020. Nadia has budgeted the following for the first two months of the year 2020:

1.		Collections from customers: January $90,900; February $109,300.
2.		Payments to suppliers: January $39,900; February $49,500.
3.		Direct labour: January $29,700; February $35,300. Wages are paid in the month they are incurred.
4.		Manufacturing overhead: January $25,000; February $30,200. Overhead costs are paid as incurred.
5.		Selling and administrative expenses: January $15,900; February $22,000. These costs do not include depreciation and they are paid as incurred.
6.		Sales of investments in January are expected to realize $10,100 in cash. Nadia Company wants to keep a minimum monthly cash balance of $20,000.

Prepare a cash budget for January and February.

NADIA COMPANY Cash Budget For 2020
		January		February
Ending cash balanceCash receiptsTotal cash availableTotal receiptsCash disbursementsBeginning cash balanceFinancing borrowing needsTotal disbursementsExcess of cash over cash disbursements		$		$
AddLess : Ending cash balanceBeginning cash balanceCash receiptsTotal cash availableExcess of cash over cash disbursementsFinancing borrowing needsTotal receipts
Collections from customers    Manufacturing overhead    Purchase of land    Sale of investments    Payment to suppliers    Labour    Collection of notes receivable    Selling and administrative expenses    Purchase of equipment
Payment to suppliers    Manufacturing overhead    Sale of investments    Collection of notes receivable    Selling and administrative expenses    Purchase of land    Purchase of equipment    Labour    Collections from customers
Financing borrowing needs    Ending cash balance    Beginning cash balance    Excess of cash over cash disbursements    Cash receipts    Total receipts    Total cash available
AddLess : Total cash availableTotal disbursementsEnding cash balanceFinancing borrowing needsExcess of cash over cash disbursementsBeginning cash balanceCash disbursements
Collection of notes receivable    Sale of investments    Payment to suppliers    Purchase of land    Labour    Collections from customers    Manufacturing overhead    Purchase of equipment    Selling and administrative expenses
Selling and administrative expenses    Manufacturing overhead    Purchase of land    Purchase of equipment    Collection of notes receivable    Collections from customers    Sale of investments    Payment to suppliers    Labour
Collection of notes receivable    Purchase of equipment    Payment to suppliers    Selling and administrative expenses    Collections from customers    Manufacturing overhead    Labour    Purchase of land    Sale of investments
Sale of investments    Purchase of equipment    Labour    Selling and administrative expenses    Payment to suppliers    Manufacturing overhead    Collections from customers    Collection of notes receivable    Purchase of land
Beginning cash balanceTotal disbursementsCash receiptsCash disbursementsExcess of cash over cash disbursementsTotal receiptsEnding cash balanceTotal cash availableFinancing borrowing needs
Cash receiptsTotal receiptsTotal cash availableCash disbursementsFinancing borrowing needsExcess of cash over cash disbursementsTotal disbursementsBeginning cash balanceEnding cash balance
Total receiptsTotal cash availableCash disbursementsEnding cash balanceCash receiptsTotal disbursementsBeginning cash balanceFinancing borrowing needsExcess of cash over cash disbursements		$		$

Answer 1