Castle Corporation prepares monthly cash budgets. Here are relevant data from operating budgets for 2014. All sales
Question:
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 $326,000; February $378,000.
2. Payments for purchases: January $110,000; February $135,000.
3. Other receipts: January: collection of December 31, 2013, notes receivable $15,000; February: proceeds from sale of securities $4,000.
4. Other disbursements: February $10,000 cash dividend.
The companys cash balance on January 1, 2014, is expected to be $46,000. The company wants to maintain a minimum cash balance of $40,000.
Instructions
Prepare a cash budget for January andFebruary.
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...
Step by Step Answer:
Accounting Tools for Business Decision Making
ISBN: 978-1118128169
5th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso