Using the information provided on the next page, prepare a cash budget for Short-Run Inc. for the year ended December 31, 2014, in good form.
Some important things to consider for good form:
a. Include a complete, proper three-line heading: (1) name of organization, (2) description of statement, and (3) period of time covered by statement.
b. Do not use any abbreviations or acronyms.
c. Do NOT use the books breakdown of operating, investing, and financing for the cash budget. Instead, use this simpler format.
Cash balance, January 1, 2014
Add: Cash receipts—show these in detail
Cash available—a subtotal from adding the above items together
Deduct: Cash disbursements— show these in detail
Cash excess before investing (if you have too much) OR Cash deficiency before financing (if you have too little)
Investing or Financing, as appropriate
Cash balance, December 31, 2014
d. As indicated in the simplified form above, show the detail in the statement. For example, do not show the cash collections from sales and any other source of cash together on one line of the statement; show each separately. For another example, do not show the salaries and any other cash outlay together on one line; show each separately.
e. Do not show items that do not exist in the statement. For specific examples, if there is financing needed, then do not show investing. On the other hand, if there is excess cash to invest, then do not show financing.
f. Use a double underline on the final total (the end of period cash balance) and only on the final total. To be clear, do not use a double underline on any subtotals, such as cash available; if needed, use a single underline on subtotals.
