The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. Y

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The controller of Bridgeport Housewares Inc. instructs you to
prepare a monthly cash budget for the next three months. You are
presented with the following budget information:
The company expects to sell about 10% of its merchandise for
cash. Of sales on account, 70% are expected to be collected in the
month following the sale and the remainder the following month
(second month following sale). Depreciation, insurance, and
property tax expense represent $6,000 of the estimated monthly
manufacturing costs. The annual insurance premium is paid in
January, and the annual property taxes are paid in December. Of the
remainder of the manufacturing costs, 80% are expected to be paid
in the month in which they are incurred and the balance in the
following month.
Current assets as of September 1 include cash of $40,000,
marketable securities of $57,000, and accounts receivable of
$118,500 ($25,500 from July sales and $93,000 from August sales).
Sales on account for July and August were $85,000 and $93,000,
respectively. Current liabilities as of September 1 include $6,000
of accounts payable incurred in August for manufacturing costs. All
selling and administrative expenses are paid in cash in the period
they are incurred. An estimated income tax payment of $16,000 will
be made in October. Bridgeport’s regular quarterly dividend of
$6,000 is expected to be declared in October and paid in November.
Management desires to maintain a minimum cash balance of
$39,000.
Required:
Question Content Area
1. Prepare a monthly cash budget and
supporting schedules for September, October, and November. Assume
360 days per year for interest calculations.