XYZ Company prepares monthly cash budgets. Using the information below prepare a cash budget for February. January
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Question:
XYZ Company prepares monthly cash budgets. Using the information below prepare a cash budget for February.
January | February | |
Sales | 350,000 | 400,000 |
Direct Materials Purchases | 95,000 | 110,000 |
Direct Labour | 80,000 | 95,000 |
Manufacturing Overhead | 60,000 | 75,000 |
Selling and Administrative expenses | 75,000 | 85,000 |
- All sales are on account and are collected 60% in the month of sale and 40% in the following month.
- 40 % of the direct material purchases are paid in cash in the month of purchase and the remainder in the month following purchase
- All other items are paid for in the month they are incurred.
- Other receipts - $5,000 from the sale of investments
- Other payments - $10,000 for new machinery.
- The cash balance at 1st February is expected to be $60,000
Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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