8. Preparing a cash budget
Gazzo Inc. is a distributor of men\'s , women\'s, and children\'s shoes. The company imports
shoes primarily from Europe and sells them to specialty clothing and shoe stores around the
country. The company\'s chief accountant has gathered the following information to aid in the
preparation of a cash budget for the second quarter of 2015.
The company expects to pay cash on its Accounts Payable for manufacturing costs during the
three months as follows:
April $992,410
May 1,069,028
June 1,534,117
A. Cash payments for manufacturing costs for each month are first calculated on which form?
Choice from the following:
Direct materials purchased budget.
Budgeted income statement.
Schedule of payment for manufacturing costs.
B. Complete the following cash budget from Gazzo Inc.:
Gazzo Inc. Cash Budget For the Quarter ending June 30,2015
Estimated cash payments for:AprilMayJuneInterest revenue from
investments$2,550$2,759$1,990Estimated cash collections of accounts
receivable2,789,8002,767,7802,770,400Interest payments on a line of
credit13,26011,06015,509Income tax paymentsPurchase of factory equipment for
cash1,227,2601,642,010734,408Selling and administrative expense cash
payments204,390197,910210,600Minimun cash balance255,000255,000255,000Cash balance at
beginning of month266,240
Solution.
8. Preparing a cash budgetGazzo Inc. is a distributor of mens , .pdf
1. 8. Preparing a cash budget
Gazzo Inc. is a distributor of men's , women's, and children's shoes. The company imports
shoes primarily from Europe and sells them to specialty clothing and shoe stores around the
country. The company's chief accountant has gathered the following information to aid in the
preparation of a cash budget for the second quarter of 2015.
The company expects to pay cash on its Accounts Payable for manufacturing costs during the
three months as follows:
April $992,410
May 1,069,028
June 1,534,117
A. Cash payments for manufacturing costs for each month are first calculated on which form?
Choice from the following:
Direct materials purchased budget.
Budgeted income statement.
Schedule of payment for manufacturing costs.
B. Complete the following cash budget from Gazzo Inc.:
Gazzo Inc. Cash Budget For the Quarter ending June 30,2015
Estimated cash payments for:AprilMayJuneInterest revenue from
investments$2,550$2,759$1,990Estimated cash collections of accounts
receivable2,789,8002,767,7802,770,400Interest payments on a line of
credit13,26011,06015,509Income tax paymentsPurchase of factory equipment for
cash1,227,2601,642,010734,408Selling and administrative expense cash
payments204,390197,910210,600Minimun cash balance255,000255,000255,000Cash balance at
beginning of month266,240
Solution
