Question

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

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