Question

Nadia Company expects to have a cash balance of $44,800 on January 1, 2020. Nadia has...

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 $90,700; February $109,500.
2. Payments to suppliers: January $39,900; February $49,700.
3. Direct labour: January $30,300; February $35,100. Wages are paid in the month they are incurred.
4. Manufacturing overhead: January $25,200; February $30,200. Overhead costs are paid as incurred.
5. Selling and administrative expenses: January $16,100; February $22,200. These costs do not include depreciation and they are paid as incurred.
6. Sales of investments in January are expected to realize $9,900 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

Cash disbursementsTotal cash availableBeginning cash balanceEnding cash balanceTotal disbursementsFinancing borrowing needsExcess of cash over cash disbursementsCash receiptsTotal receipts

$ $

AddLess

:

Ending cash balanceCash receiptsFinancing borrowing needsTotal receiptsTotal cash availableBeginning cash balanceExcess of cash over cash disbursements

    Selling and administrative expenses    Payment to suppliers    Purchase of land    Purchase of equipment    Labour    Collection of notes receivable    Manufacturing overhead    Collections from customers    Sale of investments    

    Collections from customers    Purchase of equipment    Sale of investments    Collection of notes receivable    Payment to suppliers    Manufacturing overhead    Selling and administrative expenses    Labour    Purchase of land    

    Cash receipts    Excess of cash over cash disbursements    Total receipts    Ending cash balance    Total cash available    Financing borrowing needs    Beginning cash balance    

AddLess

:

Total cash availableExcess of cash over cash disbursementsEnding cash balanceCash disbursementsBeginning cash balanceTotal disbursementsFinancing borrowing needs

    Payment to suppliers    Purchase of land    Sale of investments    Labour    Manufacturing overhead    Selling and administrative expenses    Collections from customers    Purchase of equipment    Collection of notes receivable    

    Purchase of equipment    Sale of investments    Purchase of land    Payment to suppliers    Labour    Manufacturing overhead    Selling and administrative expenses    Collections from customers    Collection of notes receivable    

    Labour    Manufacturing overhead    Collections from customers    Purchase of land    Purchase of equipment    Payment to suppliers    Collection of notes receivable    Sale of investments    Selling and administrative expenses    

    Labour    Collection of notes receivable    Payment to suppliers    Manufacturing overhead    Purchase of equipment    Sale of investments    Selling and administrative expenses    Collections from customers    Purchase of land    

Excess of cash over cash disbursementsTotal cash availableCash disbursementsFinancing borrowing needsTotal disbursementsEnding cash balanceBeginning cash balanceCash receiptsTotal receipts

Excess of cash over cash disbursementsBeginning cash balanceEnding cash balanceTotal receiptsCash receiptsTotal cash availableCash disbursementsTotal disbursementsFinancing borrowing needs

Financing borrowing needsTotal cash availableCash receiptsExcess of cash over cash disbursementsTotal disbursementsBeginning cash balanceTotal receiptsEnding cash balanceCash disbursements

$ $

Homework Answers

Answer #1

Answer-

NADIA COMPANY
CASH BUDGET
PARTICULARS JANUARY FEBRUARY
$ $
Beginning cash balance (A) 44800 33900
Add- Budgeted cash receipts
Collection from customers 90700 109500
Sale of investments 9900 0
Total cash available for use (B) 145400 143400
Less- Cash Payments
Payment to suppliers 39900 49700
Direct labor 30300 35100
Manufacturing overhead 25200 30200
Selling & Administrative costs excliuding depreciation 16100 22200
Total cash payments (C) 111500 137200
Cash surplus/ (Deficit) (D=A+B-C) 33900 6200
Financing:-
Add-Borrowings 0 13800
Less-Repayments 0 0
Budgeted ending cash balance 33900 20000
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