The North Manufacturing Company expects to start January 1, 2024, with a cash balance of $65,000....

 

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The North Manufacturing Company expects to start January 1, 2024, with a cash balance of $65,000. Additional information for the cash budget covering 2024 by quarters is as follows: Cash collections from customers: $200,000 in quarter 1, $240,000 in quarter 2, $300,000 in quarter 3, and $390,000 in quarter 4. Payments for purchases of direct materials: $94,000 in quarter 1, $110,000 in quarter 2, $125,000 in quarter3, and $135,000 in quarter 4. Payments for direct labor: $72,000 in quarter 1, $90,000 in quarter 2, 115,000 in quarter 3, and $130,000 in quarter 4. Manufacturing overhead (includes depreciation of $10,000): $45,000 in quarters 1 and 2, $50,000 in quarter 3, and $55,000 in quarter 4. Paid in the period incurred (except depreciation). Selling and administrative expenses (excludes depreciation): $14,000 in quarter 1, $15,000 in quarter 3, $25,000 in quarter 3 and $16,000 in quarter 4. Selling and administrative expenses are paid in the same period as incurred. The company paid cash dividends of $30,000 to shareholders in quarter 2. The company will purchase and pay for a new computer system in the fourth quarter $20,000. The company received $15,000 from the sale of retired equipment in quarter 2. The company has a line of credit at a financial institution that enables it to borrow up to $50,000. The company will borrow money at the beginning of a period when it needs money and repays borrowed money with accumulated interest at the end of the period when it has cash in excess of its minimum desired balance of $50,000. The annual interest rate on borrowed money is 9%. Required: 1. Prepare the cash budget for the North Manufacturing for 2024. Show each quarter in a column, totals for the 4 quarters together are also required. Make sure you have a complete and accurate heading and use the appropriate labels. 2. Identify the cash balance that would be on the balance sheet as of December 31, 2024. The North Manufacturing Company expects to start January 1, 2024, with a cash balance of $65,000. Additional information for the cash budget covering 2024 by quarters is as follows: Cash collections from customers: $200,000 in quarter 1, $240,000 in quarter 2, $300,000 in quarter 3, and $390,000 in quarter 4. Payments for purchases of direct materials: $94,000 in quarter 1, $110,000 in quarter 2, $125,000 in quarter3, and $135,000 in quarter 4. Payments for direct labor: $72,000 in quarter 1, $90,000 in quarter 2, 115,000 in quarter 3, and $130,000 in quarter 4. Manufacturing overhead (includes depreciation of $10,000): $45,000 in quarters 1 and 2, $50,000 in quarter 3, and $55,000 in quarter 4. Paid in the period incurred (except depreciation). Selling and administrative expenses (excludes depreciation): $14,000 in quarter 1, $15,000 in quarter 3, $25,000 in quarter 3 and $16,000 in quarter 4. Selling and administrative expenses are paid in the same period as incurred. The company paid cash dividends of $30,000 to shareholders in quarter 2. The company will purchase and pay for a new computer system in the fourth quarter $20,000. The company received $15,000 from the sale of retired equipment in quarter 2. The company has a line of credit at a financial institution that enables it to borrow up to $50,000. The company will borrow money at the beginning of a period when it needs money and repays borrowed money with accumulated interest at the end of the period when it has cash in excess of its minimum desired balance of $50,000. The annual interest rate on borrowed money is 9%. Required: 1. Prepare the cash budget for the North Manufacturing for 2024. Show each quarter in a column, totals for the 4 quarters together are also required. Make sure you have a complete and accurate heading and use the appropriate labels. 2. Identify the cash balance that would be on the balance sheet as of December 31, 2024.

Answer rating: 100% (QA)

North Manufacturing Company Cash Budget for 2024 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total cashbalancebeginning 65000 cashcollections 200000 24000... View the full answer