Refer to the information in PB8-1. Beach Wind Company had $12,200 cash on hand on April 1.
Of its sales, 60 percent is cash. Of the credit sales, 50 percent is collected during the month of the sale and 50 percent is collected during the month following the sale.
Of raw material purchases, 60 percent is paid for during the month purchased, and 40 percent is paid in the following month. Raw materials purchases for March totaled $800. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $280 in depreciation. Beach Wind plans to spend $15,000 on equipment during April.
March .... 850
April .... 700
May .... 650
June .... 720
July .... 830
August .... 760

Prepare the following for quarter 2:
1. Budgeted cash receipts. Include each month (April–June) as well as quarter 2 totals.
2. Budgeted cash payments.
3. Cash budget. Assume the company can borrow in increments of $1,000 to maintain a minimum cash balance of $10,000.

  • CreatedFebruary 27, 2015
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