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explain and give final summary5. The cash balance in the bank at the end of the first quarter is $45,500. (a) Prepare a cash budget for Bridgeport Co. for the second quarter of 2022. BRIDGEPORT CO. Cash Budget For the Second Quarter Ended June 30, 2022 4 $ Other information: 1. Sales (made evenly throughout the quarter) Quarter 1 (actual) $605,000 Quarter 2 (forecast) 397,400 Quarter 3 (forecast) 802,600 Collections from sales are as follows: 50% in the quarter of sale; 45% in the following quarter; 5% uncollectible. 2. Purchases (made evenly throughout the quarter) Quarter 1 (actual) $299,220 The gross margin ratio is constant at 40%. Cash payments for purchases are as follows: 50% in the quarter of purchase and 50% in the following quarter. Merchandise purchased during a quarter would include 25% of the next quarter's forecast sales. 3. The company purchased capital equipment for $149,800 in February 2021. The estimated useful life of this equipment is 10 years; it has no estimated scrap value. 4. Dividends of $19,900 are declared on the last day of each quarter and are paid at the end of the next month. Bridgeport Co. began operations in January 2021. The information below is for Bridgeport Co!s operations for the three months from January to March (the first quarter) of 2022: Expenses for Quarter 1 Depreciation $35,000 Factory overhead 15,100 Income taxes 25,000 Payroll 29,200 Selling costs (2% commission on sales) 12,100 Administrative costs 14,900 Costs are assumed to be incurred evenly throughout the year, with the exception of depreciation and income taxes. Depreciation on new assets is first taken in the quarter after the quarter in which they are purchased. Income taxes are payable in semi-annual instalments on the first day of each six-month period, based on last year’s actual taxes of $29,800.

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explain and give final summaryUploaded ImageUploaded ImageUploaded Image5. The cash balance in the bank at the end of the first quarter is $45,500. (a) Prepare a cash budget for Bridgeport Co. for the second quarter of 2022. BRIDGEPORT CO. Cash Budget For the Second Quarter Ended June 30, 2022 4 $ Other information: 1. Sales (made evenly throughout the quarter) Quarter 1 (actual) $605,000 Quarter 2 (forecast) 397,400 Quarter 3 (forecast) 802,600 Collections from sales are as follows: 50% in the quarter of sale; 45% in the following quarter; 5% uncollectible. 2. Purchases (made evenly throughout the quarter) Quarter 1 (actual) $299,220 The gross margin ratio is constant at 40%. Cash payments for purchases are as follows: 50% in the quarter of purchase and 50% in the following quarter. Merchandise purchased during a quarter would include 25% of the next quarter's forecast sales. 3. The company purchased capital equipment for $149,800 in February 2021. The estimated useful life of this equipment is 10 years; it has no estimated scrap value. 4. Dividends of $19,900 are declared on the last day of each quarter and are paid at the end of the next month. Bridgeport Co. began operations in January 2021. The information below is for Bridgeport Co!s operations for the three months from January to March (the first quarter) of 2022: Expenses for Quarter 1 Depreciation $35,000 Factory overhead 15,100 Income taxes 25,000 Payroll 29,200 Selling costs (2% commission on sales) 12,100 Administrative costs 14,900 Costs are assumed to be incurred evenly throughout the year, with the exception of depreciation and income taxes. Depreciation on new assets is first taken in the quarter after the quarter in which they are purchased. Income taxes are payable in semi-annual instalments on the first day of each six-month period, based on last year’s actual taxes of $29,800.

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Asked by: sreegeeth
Created at: 2025-07-26 10:57:01

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Let's break down how to **prepare the cash budget** for Bridgeport Co. for the second quarter of 2022, step by step, using the provided data. --- ### **Step 1: Cash Balance at Beginning** - **Cash balance at end of Q1 (also beginning of Q2):** **$45,500** --- ### **Step 2: Add Cash Receipts** #### **A. Collections from Sales** Sales and collection pattern: - Q1 sales (actual): $605,000 - Q2 sales (forecast): $397,400 - Collections: 50% in quarter of sale, 45% in next quarter, 5% uncollectible. **Collections in Q2:** - From Q1 sales: 45% of $605,000 = **$272,250** - From Q2 sales: 50% of $397,400 = **$198,700** **Total collections in Q2 = $272,250 + $198,700 = $470,950** --- ### **Step 3: Subtract Cash Disbursements** #### **A. Payments for Purchases** - Q1 purchases: $299,220 - Payments: 50% in quarter of purchase, 50% in next quarter. - Q2 purchases calculation: 25% next Q sales forecast × Q3 sales ($802,600 × 25%) = $200,650 **Payments in Q2:** - 50% of Q1 purchases: 0.5 × $299,220 = **$149,610** - 50% of Q2 purchases: 0.5 × $200,650 = **$100,325** **Total payments for purchases in Q2 = $149,610 + $100,325 = $249,935** #### **B. Operating Expenses** **Factory overhead (Q1):** $15,100 (evenly spread, so use Q2's forecast if not otherwise stated — but only Q1 given, so assume same) **Payroll:** $29,200 **Selling costs (2% of sales):** 2% × $397,400 = **$7,948** **Administrative costs:** $14,900 **Note:** **Depreciation is non-cash, so ignore.** #### **C. Income Taxes** - Income taxes for 2022: $29,800 (payable July 1, not in Q2) #### **D. Dividends** - $19,900 paid at end of next month after declared in Q2 (assume paid in Q2). --- ### **Step 4: Total Disbursements** Add up all disbursements for Q2: | **Type** | **Amount** | |-------------------------|--------------| | Purchases | $249,935 | | Factory Overhead | $15,100 | | Payroll | $29,200 | | Selling Costs | $7,948 | | Admin Costs | $14,900 | | Dividends | $19,900 | | **Total Disbursements** | **$336,983** | --- ### **Step 5: Calculate Ending Cash Balance** **Beginning Cash**: $45,500 **Add Receipts**: +$470,950 **Subtotal**: $516,450 **Less Disbursements**: -$336,983 **Ending Cash**: **$179,467** --- ## **Final Cash Budget Summary** | **Bridgeport Co. Cash Budget** | **Q2 2022** | |------------------------------------------|---------------| | Beginning Cash Balance | $45,500 | | Add: Cash Receipts | | | - Collections from Customers | $470,950 | | **Total Cash Available** | $516,450 | | Less: Cash Disbursements | | | - Purchases | $249,935 | | - Factory Overhead | $15,100 | | - Payroll | $29,200 | | - Selling Costs | $7,948 | | - Administrative Costs | $14,900 | | - Dividends | $19,900 | | **Total Disbursements** | $336,983 | | **Ending Cash Balance (June 30, 2022)** | **$179,467** | --- ## **Summary** The cash budget shows that Bridgeport Co. will have an ending cash balance of **$179,467** at the end of the second quarter of 2022, after accounting for all expected receipts and disbursements. This process helps the company ensure it has enough cash to meet its obligations and avoid liquidity problems. --- **If you need the template filled out with the numbers, let me know!**

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