Denim Company manufactures and sells formal suits. It is ready to begin its first quarter, in...

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Denim Company manufactures and sells formal suits. It is ready to begin its first quarter, in which they have their highest sales. The company has approached the Bank for a loan, and the Bank has asked the corporation to submit a cash budget for the first quarter. The following data has provided to you: a. At the beginning of the fourth quarter the cash balance will be $16,500, the company must maintain a cash balance of at least $22,000 at the end of each month. b. Sales figures is given below Materials Purchase Salary Expense Utilities Expense January 2024 $68,000 February 2024 $58,000 March 2024 $58,000 c. Budgeted raw materials purchase and expenses is given below January February March Depreciation Expense Rent Expense Month 64000 18000 1800 3,500 50000 18000 1600 3,500 Total Cash collection from Sales 3500 58000 18000 1900 3,000 3,000 3,000 d. Rent is always paid in the following month. e. Rent due for the month of December to be paid in January is $ 2,000. f. The company paid a dividend of $3,200 in March. g. They bought a computer for $3,200 and paid in cash in January. a. The company has an agreement with a local bank that allows it to borrow at the beginning of each month. The interest rate on these loans is 3% per month. The company would repay the loan plus accumulated interest at the end of the quarter. Required: Prepare a cash budget for the first quarter. Denim Company manufactures and sells formal suits. It is ready to begin its first quarter, in which they have their highest sales. The company has approached the Bank for a loan, and the Bank has asked the corporation to submit a cash budget for the first quarter. The following data has provided to you: a. At the beginning of the fourth quarter the cash balance will be $16,500, the company must maintain a cash balance of at least $22,000 at the end of each month. b. Sales figures is given below Materials Purchase Salary Expense Utilities Expense January 2024 $68,000 February 2024 $58,000 March 2024 $58,000 c. Budgeted raw materials purchase and expenses is given below January February March Depreciation Expense Rent Expense Month 64000 18000 1800 3,500 50000 18000 1600 3,500 Total Cash collection from Sales 3500 58000 18000 1900 3,000 3,000 3,000 d. Rent is always paid in the following month. e. Rent due for the month of December to be paid in January is $ 2,000. f. The company paid a dividend of $3,200 in March. g. They bought a computer for $3,200 and paid in cash in January. a. The company has an agreement with a local bank that allows it to borrow at the beginning of each month. The interest rate on these loans is 3% per month. The company would repay the loan plus accumulated interest at the end of the quarter. Required: Prepare a cash budget for the first quarter.

Answer rating: 100% (QA)

CASH BUDGET FOR FIRST QUARTER PARTICULAR JAN2024 FEB2024 MAR2024 Opening Cash in ... View the full answer