Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 72

Cash budget The monthly cash budgets for the second quarter of 2010 follow ($000 omitted) for Morrison Mfg. Co. A minimum cash balance of $30,000 is required to start each month, and a $100,000 line of credit has been arranged with a local bank at a 8% interest rate.

	April	May	June	Total
Cash balance, beginning	$ 26	$ ?	$ ?	$ 26
Add collections from customers	?	108	?	?
Total cash available	$ 94	$ ?	$166	$338
Less disbursements:
Purchase of inventory	$ ?	$ 60	$ 48	$ ?
Operating expenses	30	?	?	?
Capital additions	34	8	?	44
Payment of dividends	?	?	?	8
Total disbursements	$ ?	$108	$ 82	$304
Excess (deficiency) of cash available
over disbursements	$(20)	$ ?	$ 84	$ ?
Borrowings	?	?	?	?
Repayments (including interest)	?	?	?	?
Cash balance, ending	$ ?	$30	$ ?	$ 33

Required:

Calculate the missing amounts. (Hint: The total cash available includes col­lections from customers for all three months, plus the beginning cash balance from April 1, 2010.)

Step 1 of 17

Cash budget is a detailed plan which shows how the cash resources will be acquired and used over a specific period of time.

Fill the missing amounts in the below Cash Budget

($000 omitted)

M. M. Co
Cash bud get
Particulars	Second quarter of 2013
	April	May	June	Total
Cash balance, beginning	$ 26	$ 30	$ 30	$ 26
Add: Collections from customers	$ 68	$ 108	$ 136	$ 312
Total cash available	$ 94	$ 138	$ 166	$ 338
Less: Disbursements
Purchase of inventory	$ 50	$ 60	$ 48	$ 158
Operating expenses	$ 30	$ 40	$ 24	$ 94
Capital additions	$ 34	$ 8	$ 2	$ 44
Payment of dividends	$ -	$ -	$ 8	$ 8
Total disbursements	$ 114	$ 108	$ 82	$ 304
Excess (deficiency) of cash available over disbursements	$ (20)	$ 30	$ 84	$ 34
Borrowings	$ 50	$ -	$ -	$ 50
Repayments (including interest)	$ -	$ -	$ 51	$ 51
Cash balance, ending	$ 30	$ 30	$ 33	$ 33