Question

Use the following information:Beginning cash balance on March 1, $72,000.Cash receipts from sales, $300,000.Budgeted cash payments for direct materials, $140,000.Budgeted cash payments for direct labor, $80,000.Other budgeted cash expenses, $45,000.Cash repayment of bank loan, $20,000.Prepare a cash budget for the month ended on March 31 for Gado Company. The budget should show expected cash receipts and cash payments for the month of March and the balance expected on March 31

Answer 1

Answer and Explanation:

The preparation of the cash budget for the month of March ended is presented below:

Cash Budget

Particulars Amount ($)

Opening Cash Balance 72,000

Add: Cash Receipts from Sales 300,000

Total Cash Available 372,000

Less:

Cash Payments

Purchases 140,000

Salaries 80,000

Cash Expenses 45,000

Repayment of Bank Loan 20,000

Total Payments -285,000

Closing Cash Balance 87,000

We simply deduct the all payments from the total cash available so that the ending balance of cash could come