Question

qs 20-24 (algo) manufacturing: cash budget lo p2

using the following information:

a. beginning cash balance on march 1, $78,000.
b. cash receipts from sales, $305,000.
c. cash payments for direct materials, $133,000.
d. cash payments for direct labor, $78,000.
e. cash payments for overhead, $35,000.
f. cash payments for sales commissions, $7,000.
g. cash payments for interest, $160 (1% of beginning loan balance of $16,000).
h. cash repayment of loan, $16,000.

prepare a cash budget for march for gado company.

Explanation:

Calculate total cash available

Using the Cash Budgeting knowledge point

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Calculate total cash payments

Using the Cash Budgeting knowledge point

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Calculate preliminary cash balance

Using the Cash Budgeting knowledge point

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Account for financing activities

Using the Financing Activity knowledge point

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Answer:

GADO COMPANY
March
Beginning cash balance	\$78,000
Cash receipts from sales	305,000
Total cash available	\$383,000
Less: Cash payments for
Direct materials	\$133,000
Direct labor	78,000
Overhead	35,000
Sales commissions	7,000
Total cash payments	253,000
Preliminary cash balance	\$130,000
Financing
Repayment of loan	(16,000)
Interest paid	(160)
Ending cash balance	\$113,840