Question

Please explain steps: thank u

Answer 1

	Cash receipts from customers
						First Quarter 2018
	Total sales					215000
	Cash receipts from customers:
	Accounts receivable balance, December 31,2017					18500
	Ist qtr-Sales		(80% of total sales)			172000
	Total cash receipts from customers					190500
	Accounts receivable balance, March 31,2018
						$
	Beginning balance					18500
	Add: Total sales					215000
						233500
	Less:cash receipts from customers					190500
	Accounts receivable balance, March 31,2018					43000
	Cash payments
						First Quarter 2018
	Total direct material purchases					41150
	Cash payments
	Direct materials:
	Accounts payable balance, December 31,2017					11600
	Ist qtr-Direct material purchases
	(70% of total direct material purchases)					28805
	Total payment for direct materials					40405
	Direct labor:
	Total payments for direct labor					36600
	Manufacturing overhead:
	Variable manufacturing overhead					1075
	Insurance and property taxes					6950
	Total payments for manufacturing overhead					8025
	Selling and administrative expenses:
	Salaries expense					4000
	Rent expense					1000
	Insurance expense					1300
	Supplies expense					2150
	Total payments for selling and administrative expenses					8450
	Income taxes:
	Total payments for income taxes					46000
	Capital expenditures:
	Total payments for capital expenditures					38000
	Total cash payments					177480
	Accounts payable balance,March 31,2018:
						$
	Beginning balance					11600
	Total direct materials purchases					41150
						52750
	Less:Total payments for direct materials					40405
	Accounts payable balance,March 31,2018					12345
			Cash budget
						$
	Beginning cash balance					40000
	Cash receipts					190500
	Cash available					230500
	Cash payments:
		Purchases of direct materials				40405
		Direct labor				36600
		Manufacturing overhead				8025
		Selling and administrative expense				8450
		Income taxes				46000
		Capital expenditures				38000
	Total cash payments					177480
	Ending cash balance			(230500-177480)		53020
	Depreciation need not be taken in the cash budget since it involves no payment of cash.It is a non-cash expenditure