Question

Bramble Corp. prepares monthly cash budgets. Here are relevant data from operating budgets for 2017. January...

Bramble Corp. prepares monthly cash budgets. Here are relevant data from operating budgets for 2017.

January

February

Sales

$ 361,300 $ 401,400

Purchases

120,400 132,000

Salaries

83,000 81,100

Administrative expenses

70,200 73,600

Selling expenses

80,000 87,400


All sales and purchases are on account. Budgeted collections and disbursement data are given below. All other expenses are paid in the month incurred except for administrative expenses, which include $ 1,000 of depreciation per month.

Other data.

1. Collections from customers: January $ 333,800; February $ 378,000.
2. Payments for purchases: January $ 102,600; February $ 142,300.
3. Other receipts: January: collection of December 31, 2016, notes receivable $ 18,700; February: proceeds from sale of securities $ 5,700.
4. Other disbursements: February $ 12,500 cash dividend.


The company’s cash balance on January 1, 2017, is expected to be $ 48,700. The company wants to maintain a minimum cash balance of $ 63,330

Homework Answers

Answer #1

Cash budget :

January February
Beginning balance 48700 6640066
Collection from customer 333800 378000
Collection of notes receivable 18700
Proceeds from sale of secruities 5700
Total cash receipts 352500 383700
Total Cash available 401200 450100
Cash disbursements
Payment for purchase 102600 142300
Salaries expense 83000 81100
Administrative expenses 69200 72600
Selling expenses 80000 87400
other disbursements 12500
Total cash disbursement 334800 395900
Preliminary cash balance 66400 54200
Loan (repayment) 0 9130
Ending balance 66400 63330
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