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Month the fixed selling and administrative expenses

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Unformatted text preview: 0 The in costs – primarily depreciation – that are not cash outflows of the current month. of Let’s prepare the company’s selling and administrative Let’s expense budget. expense 7-65 Selling and Administrative Expense Budget Calculate the selling and administrative cash expenses for the quarter. 7-66 Quick Check What are the total cash disbursements for selling and administrative expenses for the quarter? a. \$180,000 b. \$230,000 c. \$110,000 d. \$ 70,000 7-67 Quick Check What are the total cash disbursements for selling and administrative expenses for the quarter? a. \$180,000 b. \$230,000 c. \$110,000 d. \$ 70,000 7-68 Selling Administrative Expense Budget 7-69 Learning Objective 8 Prepare a cash budget. 7-70 Format of the Cash Budget The cash budget is divided into four sections: 1. Cash receipts section lists all cash inflows excluding cash Cash received from financing; received 2. Cash disbursements section consists of all cash payments Cash excluding repayments of principal and interest; excluding 3. Cash excess or deficiency section determines if the Cash company will need to borrow money or if it will be able to repay funds previously borrowed; and repay 4. Financing section details the borrowings and repayments Financing projected to take place during the budget period. projected 7-71 The Cash Budget Assume the following information for Royal: Maintains a 16% open line of credit for \$75,000 Maintains a minimum cash balance of \$30,000 Borrows Borrows on the first day of the month and repays loans on the last day of the month loans Pays a cash dividend of \$49,000 in April Purchases Purchases \$143,700 of equipment in May and \$48,300 in June (both purchases paid in cash) \$48,300 Has an April 1 cash balance of \$40,000 7-72 The Cash Budget Schedule of Expected Schedule of Expected Cash Collections. Cash Collections. 7-73 The Cash Budget Schedule of Expected Schedule of Expected Cash Disbursements. Cash Disbursements. Direct Labor Direct Labor Budget. Budget. Manufacturing Manufacturi...
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