Pink Martini Corporation is projecting a cash balance of $30,000 in its December 31, 2016, balance sheet.

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Pink Martini Corporation is projecting a cash balance of $30,000 in its December 31, 2016, balance sheet. Pink Martini's schedule of expected collections from customers for the first quarter of 2016 shows total collections of $180,000. The schedule of expected payments for direct materials for the first quarter of 2016 shows total payments of $41,000. Other information gathered for the first quarter of 2016 is as follows: sale of equipment $3,000; direct labour $70,000, manufacturing overhead $35,000; selling and administrative expenses $45,000; and purchase of securities $14,000. Pink Martini wants to maintain a balance of at least $25,000 cash at the end of each quarter.
Instructions
Prepare a cash budget for the first quarter.
Cash Budget
A cash budget is an estimation of the cash flows for a business over a specific period of time. These cash inflows and outflows include revenues collected, expenses paid, and loans receipts and payment.  Its primary purpose is to provide the...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Managerial Accounting Tools for Business Decision Making

ISBN: 978-1118856994

4th Canadian edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly

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