Question

Deitz Corporation is projecting a cash balance of $32,400 in its December 31, 2019, balance sheet. Deitz's schedule of expected collections from customers for the first quarter of 2020 shows total collections of $199,800. The schedule of expected payments for direct materials for the first quarter of 2020 shows total payments of $46,440. Other information gathered for the first quarter of 2020 is sale of equipment $3,240; direct labor $75,600, manufacturing overhead $37,800, selling and administrative expenses $48,600; and purchase of securities $15,120. Deitz wants to maintain a balance of at least $27,000 cash at the end of each quarter.
Prepare a cash budget for the first quarter Dietz corporation.

Answer 1

Answer:

Dietz corporation cash budget for the first quarter

Total Receipts :

Collections from Customers                           $199,800

Receipts from Sale of Equipment                      $3,240

                                                                        $203,040

Total Payments :

Direct materials                                                 $46,440

Direct labor                                                        $75,600

Manufacturing overhead                                  $37,800

Selling and administrative expenses               $48,600

Purchase of securities                                        $15,120

                                                                         $223,560

Net Receipts/(Payments)                                 ($20,520)

Opening Balance                                              $32,400

Closing Balance                                                  $11,880

Required Balance                                              $27,000

Loan (Shortfall)                                                    $15,120

Explanation:

A cash Budget shows the future estimate of future cash incomes and cash expenditures.