Acc560 Managerial Accounting: E23-12 Garza Company expects to have a cash

Acc560 Managerial Accounting

E23-12

Garza Company expects to have a cash balance of $46,000 on January 1, 2010. Relevant monthly budget data for the first 2 months of 2010 are as follows. Collections from customers: January $85,000, February $150,000. Payments for direct materials: January $50,000, February $70,000.

Direct labor: January $30,000, February $45,000. Wages are paid in the month they are incurred. Manufacturing overhead: January $21,000, February $25,000. These costs include depreciation of $1,000 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $15,000, February $20,000. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $10,000 in cash. Garza Company has a line of credit at a local bank that enables it to borrow up to $25,000. The company wants to maintain a minimum monthly cash balance of $20,000.

Instructions

Complete the cash budget for January and February. (List amounts from largest to smallest eg 10, 5, 3, 2. If answer is zero, please enter 0. Do not leave any fields blank.)
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