Question

sing the following information:beginning cash balance on march 1, $72,000.cash receipts from sales, $300,000.cash payments for direct materials, $140,000.cash payments for direct labor, $80,000.cash payments for overhead, $45,000.cash payments for sales commissions, $7,000.cash payments for interest, $200 (1% of beginning loan balance of $20,000).cash repayment of loan, $20,000.prepare a cash budget for march for gado company.

Answer 1

To prepare a cash budget for March for Gado Company, calculate the beginning cash balance and adjust it for cash receipts and payments. The ending cash balance is $99,800.

Step-by-step explanation:

To prepare a cash budget for March for Gado Company, we need to calculate the beginning cash balance and then adjust it for cash receipts and payments. Here is the calculation:

• Beginning cash balance on March 1: $72,000
• Cash receipts from sales: $300,000
• Total cash payments: $272,200 ($140,000 for direct materials + $80,000 for direct labor + $45,000 for overhead + $7,000 for sales commissions + $200 for interest + $20,000 for loan repayment)

To calculate the ending cash balance, we subtract the total cash payments from the beginning cash balance and add the cash receipts. Therefore, the cash budget for March for Gado Company is:

Ending cash balance = Beginning cash balance + Cash receipts - Total cash payments = $72,000 + $300,000 - $272,200 = $99,800