Deitz Corporation is projecting a cash balance of $30,000 in its December 31, 2016, balance sheet. Deitz's schedule of expected collections from customers for the first quarter of 2017 shows total collections of $185,000. The schedule of expected payments for direct materials for the first quarter of 2017 shows total payments of $43,000. Other information gathered for the first quarter of 2017 is sale of equipment $3,000, direct labor $70,000, manufacturing overhead $35,000, selling and administrative expenses $45,000, and purchase of securities $14,000. Deitz wants to maintain a balance of at least $25,000 cash at the end of each quarter. Prepare a cash budget for the first quarter.

Cash Budget

For the Quarter Ended March 31, 2016

$30,000 Beginning cash balance, December 31, 2016

$188,000 Total receipts

$218,000 Total available cash

-$207,000 Total disbursements

$11,000 Excess of available cash over disbursements

Financing

$14,000 Borrowings

$25,000 Ending cash balance

Explanation:

The company need to take a loan of $14,000 to end the quarter with the expected amount of $25,000, if not the company will end the quarter with $14,000 of cash.

Cash Budget

For the Quarter Ended March 31, 2016

$30,000 Beginning cash balance, December 31, 2016

Add: Receipts

$185,000 Collections from customers

$3,000 Sale of equipment

$188,000 Total receipts

$218,000 Total available cash

Less: Disbursements

-$43,000 Direct materials

-$70,000 Direct labor

-$35,000 Manufacturing overhead

-$45,000 Selling and administrative expense

-$14,000 Purchase of securities

-$207,000 Total disbursements

$11,000 Excess of available cash over disbursements

Financing

$14,000 Borrowings

$25,000 Ending cash balance