Grove, Inc. is a wholesaler for its only product, deluxe wireless electric drills, which sell for $$92$ each and cost Grove $$56$ each. On December $1,$ Grove's management requested a cash budget for December. The following selected account balances at November $30,$ were gathered by the accounting department:

Cash $$135,000$

Marketable securities $($at cost$)210,000$

Accounts receivable $($all trade$)1,710,000$

Inventories $(15,000$ units$)840,000$

Operating expenses payable $140,400$

Accounts payable $($all merchandise$)583,200$

Note payable $($due $12/31)393,000$

Actual sales for the months of October and November were $20,000$ and $30,000$ units, respectively. Projected unit sales for December and January are $50,000$ and $40,000,$ respectively. Experience indicates that $50\%$ of sales should be collected in the month of sale, $30\%$ in the month following sale, and the balance in the second month following sale. Uncollectible accounts, returns, and allowances are negligible.

Planned purchases should provide ending inventories equal to $30\%$ of next month's unit sales volume. Approximately $70\%$ of the purchases are paid for in the month of purchase and the balance in the following month.

Monthly operating expenses are budgeted at $$7\mathrm{.}10$ per unit sold plus a fixed amount of $$189,000$ including depreciation of $$81,000.$ Except for depreciation, $60\%$ of operating expenses are paid in the month incurred and the balance in the following month. Interest expense is included in operating expenses.

Special anticipated year$-$end transactions include the following:

$1.$ Declaration of a $$22,500$ cash dividend to be paid $2$ weeks after the December $20$ date of record.

$2.$ Sale of one$-$half of the marketable securities held on November $30$ a gain of $$21,000$ is anticipated.

$3.$ Pay off the note payable due December $31.$

$4.$ Trade$-$in of an old computer originally costing $$675,000$ and now having accumulated depreciation of $$540,000$ at a gain of $$157,500$ on a new computer costing $$1,370,000.$ Sufficient cash will be paid at the time of trade$-$in so that only $50\%$ of the total price will have to be financed.

$5.$ Grove's treasurer has a policy of maintaining a minimum month$-$end cash balance of $$135,000$ but wants to raise this to $$225,000$ at December $31.$ She has a standing arrangement with the bank to borrow any amount up to a limit of $$450,000.$

Prepare a cash budget for Grove, Inc., for December.

Collections in December from customers:

From October sales Answer

From November sales Answer

From December sales Answer

Total collections Answer

Payments on account for merchandise purchases:

November December

Unit Sales Answer Answer

Ending inventories Answer Answer

Total units to be available Answer Answer

Beginning inventories Answer Answer

Units to be purchased Answer Answer

Total dollar purchases Answer Answer

Portion paid in December Answer Answer

Payment of operating expenses:

November December

Total variable operating expenses Answer Answer

Fixed operating expenses Answer Answer

Total operating expenses Answer Answer

Monthly depreciation Answer Answer

Operating expenses requiring payment Answer Answer

Amounts to be paid in December Answer Answer

Cash required at time of computer purchase:

Cost of new computer Answer

Book value of old computer Answer

Gain on trade$-$in Answer

Total trade$-$in allowance Answer

Balance owing at trade$-$in Answer

Portion to be financed Answer

Cash payment required Answer

Grove, Inc.

Cash Budget

For the Month Ended December $31$

Beginning cash balance Answer

Cash receipts:

Collections from customers $($calculated above$)$ Answer

$?$ Payment on dividends declared or Payoff of note payable or Sale on securities Answer

Short$-$term borrowing Answer

Cash available Answer

Cash disbursements:

Payments on accounts payable $($calculated above$)$ Answer

Payments of operating expenses payable $($calculated above$)$ Answer

Down payment on computer $($calculated above$)$ Answer

$?$ Payment on dividends declared or Payoff of note payable or Sale on securities Answer

Total cash disbursements Answer

Ending cash balance