cash receipt and disbursements budget



The Red Midget
Company processes and distributes beans.
The beans are packed in 1-pound plastic bags and sold to grocery chains
for $0.50 each in boxes of 100 bags.
Sales in February were 14,000 boxes and the firm anticipates selling
16,000 boxes during March. Typically 80%
of the firms customers pay within the month of sale, 18% pay the month after
and 2% are never collected.

The firm buys
beans from local farmers. The farmers
are paid $0.20 per pound, cash. Most of
the processing is done automatically.
Consequently, most ($80,000) of the firms facotry overhead is
depreciation expense.

The firm
advertises heavily and will publish $75,000 worth of advertisements in popular
magazines during March. This is up frm Ferbuary’s
$60,000 for advertisements. The firm
pays for 10% of its advertising in the month the advertisments are run and 90%
the next month. Following are March’s
budgeted Income Statement and Statement of Costs of Goods Manufactured and
Sold. All costs and expenses are paid
for an incurred unless specifically indicated otherwise above. The firm will begin March with a cash balance
of $25,000 and pays a monthly dividend of $15,000 to the owners.

Income Statement

Sales $800,000

Cost of Goods Sold $540,000

Gross Margin

Administrative Salaries $80,000

Sales Commissions $69,000

Advertising $75,000

Bad debt Expense $16,000

Operating Income

Statement of Cost of Goods Manufactured and Sold

Beginning balance direct materials $20,000

Direct materials purchased $330,000

Materials Available for use $350,000

Ending Balance direct Materials $30,000

Direct materials used $320,000

Labor costs incurred $90,000

Overhead costs $115,000

Cost of goods manufactured $525,000

Beginning finished goods balance $45,000

Goods available for sale $570,000

Ending finished goods balance $30,000

Cost of goods sold

the information provided, prepare a cash receipt and disbursements budget for


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