90.2K

Verified Solution

Link Copied!

Coolidge Company is preparing a cash budget for the first three months of 2022. The following budgeted information is available: 2021 2022 Budgeted November December January February March Item: Sales $390,000 $325,000 $217,000 $347,000 $475,000 Direct Material Purchases $33,450 $27,200 $25,400 $34,200 $33,800 $169,200 $140,400 $103,500 $157,500 $180,000 $79,200 $72,800 $64,600 Direct Labor Costs Overhead Costs Selling and Admin Costs 76,600 $81,600 $67,750 $66,800 $65,400 $67,200 $68,900 All sales are on account. All direct material purchases are on account. All costs besides direct material purchases are paid as incurred. The overhead costs include $4,000 of monthly depreciation and the selling and administrative costs include $1,500 of monthly depreciation. In January, Coolidge must make an $1,800 cash dividend payment to preferred shareholders and in March, Coolidge must make a $3,000 installment payment on a note payable. The projected beginning balance of cash on January 1 is $10,000. Coolidge would like to maintain a minimum $10,000 cash balance. Required: Part A In the attached workpaper #2: 1. Using the collection pattern indicated on the workpaper, prepare a schedule of cash collection from sales for January, February, and March. (9 pts) 2. Using the payment pattern indicated on the workpaper, prepare a schedule of cash payments for direct materials for January, February, and March. (6 pts) 3. Prepare a cash budget for January, February, and March. (23 pts) Part B 1. What is the expected Accounts Receivable balance at the end of March? (3 pts) 2. What is the expected Accounts Payable balance at the end of March? (1 pt) Based on your completed cash budget, give one suggestion for amending the cash budget for EACH month (give one suggestion for January, one suggestion for February, and one suggestion for March)

Answer & Explanation Solved by verified expert

See Answer