DB Corporation is preparing its cash payments budget. The following items relate to cash payments that DB Corporation anticipates making during the second quarter of the upcoming year.
a. DB Corporation pays for 50% of its direct materials purchases in the month of purchase and the remainder the following month. DB Corporation’s direct material purchases for March through June are anticipated to be as follows:
b. Direct labour is paid in the month in which it is incurred. Direct labour for each month of the second quarter is budgeted as follows:
c. Manufacturing overhead is estimated to be 150% of direct labour cost each month. This monthly estimate includes $35,000 of depreciation on the plant and equipment. All manufacturing overhead (excluding depreciation) is paid in the month in which it is incurred.
d. Monthly operating expenses for March through June are projected to be as follows:
Monthly operating expenses are paid in the month after they are incurred. Monthly operating expenses include $12,000 for monthly depreciation on administrative offices and equipment, and $3,000 for bad debt expense.
e. DB Corporation plans to pay $5,000 (cash) for a new server in May.
f. DB Corporation must make an estimated tax payment of $12,500 on June 15.
Prepare a cash payments budget for April, May, and June and for the quarter.

  • CreatedApril 30, 2015
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