Outstanding checks, July 31, $705.
Exercise 7-14
Enright Company expects to have a cash balance of $63,550 on
January 1, 2014. These are the relevant monthly budget data for the
first two months of 2014.
1.
Collections from customers: January $88,550, February $163,550.
2.
Payments to suppliers: January $57,550, February $92,550.
3.
Wages: January $30,161, February $40,161. Wages are paid in the
month they are incurred.
4.
Administrative expenses: January $21,161, February $24,161. These
costs include depreciation of $1,000 per month. All other costs are
paid as incurred.
5.
Selling expenses: January $15,161, February $20,161. These costs
are exclusive of depreciation. They are paid as incurred.
6.
Sales of short-term investments in January are expected to realize
$12,161 in cash. Enright has a line of credit at a local bank that
enables it to borrow up to $25,000. The company wants to maintain a
minimum monthly cash balance of $37,550.
Prepare a cash budget for January and February.