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Blue Lagoon 31000

Price: $1.99


Blue Lagoon Corporation is projecting a cash balance of $31,000 in its December 31,
2011, balance sheet. Blue Lagoon’s schedule of expected collections from customers for the first
quarter of 2012 shows total collections of $180,000. The schedule of expected payments for direct
materials for the first quarter of 2012 shows total payments of $41,000. Other information gathered
for the first quarter of 2012 is: sale of equipment $3,500, direct labor $70,000, manufacturing
overhead $35,000, selling and administrative expenses $45,000, and purchase of securities $12,000.
Blue Lagoon wants to maintain a balance of at least $25,000 cash at the end of each quarter.

Instructions
Prepare a cash budget for the first quarter.

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