Homework answers / question archive / 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

Management

Share With

---

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