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The GDK Bronx corporation is preparing its cash budget for the four months ended April 30,2021
The GDK Bronx corporation is preparing its cash budget for the four months ended April 30,2021. The cost accountant has complied the following data in coordination with the credit department
a) monthly credit sales projected for the four months ended April 30,2021 as follows
credit sales
January- 20,000
february- 60,000
march- 80,000
april - 90,000
b) the collection of the credit sales has been estimated by the credit department as follows:
- 40% will be collected in the month of sale
- 20% will be collected in the 1st month after sale
- 30% will be collected in the 2nd month after sale
- 10% will remain uncollected
c) payments were estimated as follows
purchase of materials 10,000- 12,000- 14,000- 14,000
direct labor wages - 4,000-4,000-4,000-4,000
factory overhead -2,000-2,000-2,000-2,000
d) the begging cash balance in January was projected 2,2020
required
prepars a cash budget for the three months ended April 30,2021
Expert Solution
| The GDX Bronx Corporation | ||||
| Cash Budget | ||||
| For the Months Ended April 30, 2021 | ||||
| January | February | March | April | |
| Beginning Cash Balance | 22020 | 14,020 | 24,020 | 48,020 |
| Cash Collection | 8000 | 28000 | 44000 | 52000 |
| Total Cash Receipt | 30020 | 42,020 | 68,020 | 1,00,020 |
| Cash Disbursements: | ||||
| Purchases | 10,000 | 12,000 | 14,000 | 14,000 |
| Direct Labor Wages | 4,000 | 4,000 | 4,000 | 4,000 |
| Factory Overhead | 2000 | 2000 | 2000 | 2000 |
| Total Cash Disbursements | 16,000 | 18,000 | 20,000 | 20,000 |
| Ending Cash Balance (a-b) | 14,020 | 24,020 | 48,020 | 80,020 |
| Workings: | ||||
| Computation of Cash Collection: | ||||
| January | February | March | April | |
| Total Sales | 20,000 | 60,000 | 80,000 | 90,000 |
| 40% of Sales collected in Month of Sale | 8000 | 24000 | 32000 | 36000 |
| 20% of Sales collected 1 Month after Sale | 4000 | 12000 | 16000 | |
| 30% of Sales collected 2 Month after Sale | 6000 | 18000 | ||
| Total Cash Collection | 8000 | 28000 | 44000 | 52000 |
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