Use the following information to prepare the June cash budget for Springer Company. It should show expected cash receipts and cash payments for the month and the cash balance expected on June 30.a. Beginning cash balance on June 1 is $52,000.b. Cash receipts from sales are expected to be $1,625,000.c. Cash payments for direct materials and direct labor are expected to be $246,500 and $573,100, respectively.d. Budgeted cash payments for variable overhead is $340,000.e. Budgeted depreciation, the only fixed overhead estimated for June: $24,000.f. Cash selling and administrative expenses budgeted for June are $282,000.g. Bank loan interest due in June: $8,000.i. Loan payment of $50,000 should be made if the preliminary cash balance is greater than $200,000.
What will be an ideal response?
| Springer Company Cash Budget June 30 | ||
| Beginning cash balance ……………………. | $52,000 | ? |
| Cash receipts from sales ………………… | 1,625,000 | ? |
| Total cash available …..…………………… | ? | $1,677,000 |
| ? | ? | ? |
| Cash payments for: | ? | ? |
| Direct materials ………………….………… | 246,500 | ? |
| Direct Labor……………………..………… | 573,100 | ? |
| Variable overhead ………………………... | 340,000 | ? |
| Selling and administrative ………………… | 282,000 | ? |
| Interest on bank loan ………………………. | 8,000 | ? |
| Total cash payments …………………….…… | ? | 1,449,600 |
| Preliminary cash balance ……………………. | ? | 227,400 |
| Repayment of loan to bank ………………….. | ? | (50,000) |
| Ending cash balance …………………………. | ? | $177,400 |
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The financial staff at Safe-Life Systems, Inc., an alarm systems manufacturer, has estimated the following sales and other expense figures for the second half of 2017:
1. Actual sales in June 2017 were $105,000. The firm sells 60% on cash, it collects 39% of the remainder one month after the sale, and 1% are written off as bad debts. Purchases are estimated to represent 55% of the next month’s sales. The firm pays 40% of its purchases in cash and the remainder during the following month. Commissions to sales associates represent 15% of collectable sales, but the firm has decided to include a bonus of 5% more if the sales of the current month are higher than the previous one. Each of the two partners is paid 20% of the average total sales of the previous and current month, plus a 5% bonus if the sales of the current month are higher than the previous one. Monthly wages, rent, and lease expenses are $5,000, $3,000, and $1,500, respectively. The firm has an ending cash balance of $25,000 in June 2017.
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