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Financial & Managerial Acct Terms 1 & 2- BV F09 / Problem 23-4A

P23-4A

Haas Company prepares monthly cash budgets. Relevant data from operating budgets for 2009 are:

  JanuaryFebruary
 Sales$350,000 $400,000 
 Direct materials purchases110,000 130,000 
 Direct labor90,000 100,000 
 Manufacturing overhead70,000 75,000 
 Selling and administrative expenses79,000 86,000 

All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,000 of depreciation per month.

Other data:

  1. Credit sales: November 2008, $260,000; December 2008, $320,000.

  2. Purchases of direct materials: December 2008, $100,000.

  3. Other receipts: January-Collection of December 31, 2008, notes receivable $15,000; February-Proceeds from sale of securities $6,000.

  4. Other disbursements: February-Withdrawal of $5,000 cash for personal use of owner, Dewey Yaeger.

The company's cash balance on January 1, 2009, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases. (If answer is zero, please enter 0, do not leave any fields blank.)

Expected Collections from Customers

 JanuaryFebruary
November$$
December
January
February

     Total collections

$

$

Expected Payments for Direct Materials

 JanuaryFebruary
December$$
January
February

     Total collections

$

$

Prepare a cash budget for January and February in columnar form. (List multiple entries in descending order of amount for the January amounts.)

HAAS COMPANY
Cash Budget

For the Two Months Ending February 28, 2009

 JanuaryFebruary
Beginning cash balance

$

$

   
Add: Receipts  
        
        
        

         Total receipts

Total available cash

Less: Disbursements  
        
        
        
        
        

         Total disbursements

Excess (deficiency) of available cash over cash disbursements
Financing  
        
        

Ending cash balance

$

$

Question Attempts: Unlimited


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