Use the following information to prepare the September cash budget for PTO Company. Ignore the "Loan activity" section of the
budget.
a. Beginning cash balance, September 1, $49,000.
b. Budgeted cash receipts from September sales, $260,000.
c. Direct materials are purchased on credit. Purchase amounts are August (actual), $79,000; and September (budgeted), $104,000.
Payments for direct materials follow: 70% in the month of purchase and 30% in the first month after purchase.
d. Budgeted cash payments for direct labor in September, $39,000.
e. Budgeted depreciation expense for September, $3,400.
f. Budgeted cash payment for dividends in September, $54,000.
g. Budgeted cash payment for income taxes in September, $10,000.
h. Budgeted cash payment for loan interest in September, $1,400.
PTO COMPANY
Cash Budget
September
Beginning cash balance
$
49,000
Add: Cash receipts from sales
260,000
Total cash available
309,000
Less: Cash payments for
Direct labor
39,000
Direct materials
89,390
Dividends
54,000
Income taxes
10,000
Interest on loan
1,400
Total cash payments
193,790
Ending cash balance
$ 115,210