cash budget
Deitz Corporation is projecting a cash balance of $30,000 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 $185,000. The schedule of expected payments for direct materials for the first quarter of 2020 shows total payments of $43,000. Other information gathered for the first quarter of 2020 is sale of equipment $3,000, direct labor $70,000, manufacturing overhead $35,000, selling and administrative expenses $45,000, and purchase of securities $14,000. Deitz wants to maintain a balance of at least $25,000 cash at the end of each quarter.
Prepare a cash budget
| Deitz Corporation | 1st Quarter ($) |
|---|---|
| Beginng Cash Balance | 30,000 |
| Cash Receipt: | |
| Add: Collection from customers | 185,000 |
| Sale of Equipment | 3,000 |
| Total cash available | 218,000 |
| Cash Payment: | |
| Payment for direct material | 43,000 |
| Direct Labor | 70,000 |
| Manufacturing overhead | 35,000 |
| Selling and administrative expenses | 45,000 |
| Purchase of securities | 14,000 |
| Total Cash Payment | 207,000 |
| Cash surplus / (Deficit) | 11,000 |
| Add: Borrowings | 14,000 |
| Minimum balance at the end | $25,000 |