Question

Company has prepared the following schedules and additional​ information:

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​(Click the icon to view the cash receipts​ schedule.)                

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​(Click the icon to view the cash payments​ schedule.)

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​(Click the icon to view the additional​ information.) Complete a cash budget for

GrahamGraham

Company for

JanuaryJanuary​,

FebruaryFebruary

and

MarchMarch.

​(Complete all answer boxes. Enter a​ "0" for any zero balances. Round all amounts entered into the cash budget to the nearest whole dollar. Enter a cash deficiency with a minus sign or​ parentheses.)

Graham Company

Cash Budget

January, February, and March

		January
Beginning cash balance
Cash receipts
Cash available
Cash payments:
Purchases of direct materials
Direct labor
Manufacturing overhead
Selling and administrative expenses
Interest expense
Total cash payments
Ending cash balance before financing
Minimum cash balance desired
Projected cash excess (deficiency)
Financing:
Borrowing
Principal repayments
Total effects of financing
Ending cash balance

Cash Receipts from Customers

January

February

March

Total

Total sales

$15,800

$14,600

$11,100

$41,500

January

February

March

Total

Cash Receipts from Customers:

Accounts Receivable balance, January 1

January—Cash sales

$12,640

January—Credit sales, collection of January sales in January

1,580

January—Credit sales, collection of January sales in February

$1,580

February—Cash sales

11,680

February—Credit sales, collection of February sales in February

1,460

February—Credit sales, collection of February sales in March

$1,460

March—Cash sales

8,880

March—Credit sales, collection of March sales in March

1,110

Total cash receipts from customers

$14,220

$14,720

$11,450

$40,390

Accounts Receivable balance, March 31:

March—Credit sales, collection of March sales in April

$1,110

	January	February	March	Total
Cash Payments
Direct Materials:
Accounts Payable balance, January 1		$0
January—Direct material purchases paid in February			$3,300
February—Direct material purchases paid in March				$3,900
Total payments for direct materials		0	3,300	3,900	$7,200
Direct Labor:
Total payments for direct labor		3,400	4,000	3,500	10,900

Manufacturing Overhead:
Utilities for plant			450	450	900
Property taxes on plant		4,200			4,200
Total payments for manufacturing overhead		4,200	450	450	5,100
Selling and Administrative Expenses:
Utilities for office			650	650	1,300
Property taxes on office		1,440			1,440
Office salaries		6,000	6,000	6,000	18,000
Total payments for Selling and Admin. expenses		7,440	6,650	6,650	20,740
Total cash payments		$15,040	$14,400	$14,500	$43,940

Acccount balances, March 31:
Prepaid Property Taxes		$4,230
Accounts Payable		$4,100
Utilities Payable		$1,100

beginning cash balance is

$ 7 comma 000$7,000

and

GrahamGraham

desires to maintain a minimum ending cash balance of

$ 7 comma 000$7,000.

GrahamGraham

borrows cash as needed at the beginning of each month in increments of​ $1,000 and repays the amounts borrowed in increments of​ $1,000 at the beginning of months when excess cash is available. The interest rate on amounts borrowed is

1212​%

per year. Interest is paid at the beginning of the month on the outstanding balance from the previous month.

Complete a cash budget for

GrahamGraham

Company for

JanuaryJanuary​,

FebruaryFebruary

and

MarchMarch.

​(Complete all answer boxes. Enter a​ "0" for any zero balances. Round all amounts entered into the cash budget to the nearest whole dollar. Enter a cash deficiency with a minus sign or​ parentheses.)

Answer 1

Cash Budget :-

Particulars	January	February	March
Cash Beginning Balance	$7000	$7180	$7490
Add : Cash Receipts	$14220	$14720	$11450
Total Cash Available (A)	$21220	$21900	$18940
Cash Payments :-
Purchases of Direct Materials	$0	$3300	$3900
Direct Labor	$3400	$4000	$3500
Manufacturing Overhead	$4200	$450	$450
S & D Expenses	$7440	$6650	$6650
Interest Expenses	$0	$10*	$10**
Total Cash Payment (B)	$15040	$14410	$14510
Cash Ending Balance (A-B)	$6180	$7490	$4430
Add : Borrowing of Loan	$1000	$0	$3000
Less : Repayment of Loan	$0	$0	$0
Ending Balance of Cash	$7180	$7490	$7430

*Interest of February = (($1000*12%)/12) = $10

**Interest of March =  (($1000*12%)/12) = $10