General Electric Company had cash of $14,000 on hand on January 1. During the year, the company

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Question:

General Electric Company had cash of $14,000 on hand on January 1. During the year, the company expected the following cash collections from customers by quarter: (06)
First Second Third Fourth
Cash collections 110,000 177,500 183,700 136,000

Direct materials purchases in tons were budgeted as follows:
First Second Third Fourth

Direct materials purchase 65,000 75,000 55,000 50,000
The production budget showed the following unit production by quarter with an average labor rate of $40.00:
First Second Third Fourth

Units to be produced 1,500 2,000 1,700 1,500
General Electric Company planned to pay dividends of $10,000 per quarter during the year. During July, new equipment costing $60,000 will be purchased. An additional $16,000 was planned to installation costs during the fourth quarter.
The company was required to maintain a minimum cash balance of $15,000. A line of credit was available for short-term borrowings in increments of $1,000. All borrowings will be made at the beginning of a quarter and repaid at the end of a quarter. Interest on the short-term borrowings will be paid at 0.5% per quarter on the amount repaid in any quarter when a loan repayment is made. All other interest expense will be accrued each quarter.

Required:

Prepare a cash budget by quarter and for the year in total.