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    The document provides a schedule of expected cash collections and a cash budget for a company over three months (April, May, June). It shows that the company expects to collect P681,200 total from customers over the quarter. The cash budget then outlines the company's expected cash receipts, disbursements, and financing activities. It determines that the company will need to take out a P30,000 loan in April and will not be able to fully repay it by the end of June due to having a minimum required cash balance of P20,000 each month.

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    The document provides a schedule of expected cash collections and a cash budget for a company over three months (April, May, June). It shows that the company expects to collect P681,200 total from customers over the quarter. The cash budget then outlines the company's expected cash receipts, disbursements, and financing activities. It determines that the company will need to take out a P30,000 loan in April and will not be able to fully repay it by the end of June due to having a minimum required cash balance of P20,000 each month.

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    The document provides a schedule of expected cash collections and a cash budget for a company over three months (April, May, June). It shows that the company expects to collect P681,200 total from customers over the quarter. The cash budget then outlines the company's expected cash receipts, disbursements, and financing activities. It determines that the company will need to take out a P30,000 loan in April and will not be able to fully repay it by the end of June due to having a minimum required cash balance of P20,000 each month.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    45 views3 pages

    5

    Uploaded by

    Ren
    The document provides a schedule of expected cash collections and a cash budget for a company over three months (April, May, June). It shows that the company expects to collect P681,200 total from customers over the quarter. The cash budget then outlines the company's expected cash receipts, disbursements, and financing activities. It determines that the company will need to take out a P30,000 loan in April and will not be able to fully repay it by the end of June due to having a minimum required cash balance of P20,000 each month.

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    © All Rights Reserved
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    Problem 5 (Schedule of Expected Cash Collections; Cash Budget)

    Requirement 1

    Schedule of expected cash collections:

    Month

    April May June Quarter

    From accounts receivable................................ P141,000 P 7,200 P148,200

    Chapter 15 Functional and Activity-Based Budgeting

    15-14

    From April sales:

    20% × 200,000................................ 40,000 40,000

    75% × 200,000................................ 150,000 150,000

    4% × 200,000................................ P 8,000 8,000

    From May sales:

    20% × 300,000................................ 60,000 60,000

    75% × 300,000................................ 225,000 225,000

    From June sales:

    20% × 250,000................................ 50,000 50,000

    Total cash collections................................ P181,000 P217,200 P283,000 P681,200

    Requirement 2

    Cash budget:

    Month

    April May June Quarter

    Cash balance, beginning ................................ P 26,000 P 27,000 P 20,200 P 26,000

    Add receipts:

    Collections from
    customers................................ 181,000 217,200 283,000 681,200

    Total available ................................ 207,000 244,200 303,200 707,200

    Less disbursements:

    Merchandise purchases ................................ 108,000 120,000 180,000 408,000

    Payroll ................................ 9,000 9,000 8,000 26,000

    Lease payments................................ 15,000 15,000 15,000 45,000

    Advertising ................................ 70,000 80,000 60,000 210,000

    Equipment purchases ................................ 8,000 — — 8,000

    Total disbursements ................................ 210,000 224,000 263,000 697,000

    Excess (deficiency) of

    receipts over

    disbursements ................................ (3,000) 20,200 40,200 10,200

    Financing:

    Borrowings ................................ 30,000 — — 30,000

    Repayments................................ — — (30,000) (30,000)

    Interest................................ — — (1,200) (1,200)

    Total financing................................ 30,000 — (31,200) (1,200)

    Cash balance, ending P 27,000 P 20,200 P 9,000 P 9,000

    Functional and Activity-Based Budgeting Chapter 15

    15-15

    Requirement 3

    If the company needs a minimum cash balance of P20,000 to start each

    month, the loan cannot be repaid in full by June 30. If the loan is repaid in

    full, the cash balance will drop to only P9,000 on June 30, as shown above.

    Some portion of the loan balance will have to be carried over to July, at

    which time the cash inflow should be sufficient to complete repayment.


    Problem 6 (Flexible Budget)

    Summer Machine Company

    Flexible Overhead Budget

    Department 1

    Capacity

    100% 90% 80% 70% 60%

    Machine Hours 200,000 180,000 160,000 140,000 120,000

    Variable Overhead P1,300,000 P1,170,000 P1,040,000 P 910,000 P 780,000

    Fixed Overhead 300,000 300,000 300,000 300,000 300,000

    Total P1,600,000 P1,470,000 P1,340,000 P1,210,000 P1,080,000

    Manufacturing Overhead rate per machine hour P8.00

    Summer Machine Company

    Flexible Overhead Budget

    Department 2

    Capacity

    100% 90% 80% 70% 60%

    Direct Labor Hours 200,000 180,000 160,000 140,000 120,000

    Machine Hours 400,000 360,000 320,000 280,000 240,000

    Variable Overhead P1,400,000 P1,260,000 P1,120,000 P 980,000 P 840,000

    Fixed Overhead 500,000 500,000 500,000

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