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Blueline Printing's board of directors was presented with the following information about operations for an upcoming three-month period
Blueline Printing's board of directors was presented with the following information
about operations for an upcoming three-month period. The board desires to declare
a dividend at the end of June, but still maintain cash on hand of $250,000. Blueline
began April with $75,000 of cash on hand. Prepare a cash budget, and determine
how much cash will be available for the dividend. Is there any apparent risk
associated with the dividend plan?
April
May
June
Customer receipts
$700,000
$750,000
$800,000
Cash paid for direct materia
200,000
222,000
265,000
Cash paid for direct labor
245,000
265,000
300,000
Factory overhead*
140,000
145,000
154,000
SG&A**
86,000
89,000
83,000
Taxes
15,000
18,000
16,000
Equipment purchase***
500,000
* Includes monthly depreciation of $100,000
** Includes monthly depreciation of $25,000
*** Equipment purchase to be paid for in July
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