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 $90,700; 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		$		$

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