Schedule of Expected Cash Payments
Schedule of expected cash payments to suppliers shows the budgeted cash payments on purchases during a period. The schedule of expected cash payments is a component of master budget and it is prepared after direct material purchases budget but before cash budget.
The expected cash collections during a period is calculated on the basis of total purchases figure, that is obtained from direct material purchases budget, and on the percentage / proportion in which purchases are to be paid for in the current and following periods.
Format and Example
The following example shows the format of schedule of expected cash payments to suppliers. The purchases figures are obtained from the direct material purchases budget of company A. The company expects to pay 80% of the purchases in the period of purchase and 20% in following period.
a) Q1 Purchases = $15,757
Payments in Q1 = $15,757 × 80% = $12,606; Payments in Q2 = $15,757 × 20% = $3,151
b) Q2 Purchases = $12,128
Payments in Q2 = $12,128 × 80% = $9,702; Payments in Q3 = $12,128 × 20% = $2,426
c) Q3 Purchases = $17,398
Payments in Q3 = $17,398 × 80% = $13,918; Payments in Q4 = $17,398 × 20% = $3,480
d) Q4 Purchases = $28,060
Payments in Q4 = $28,060 × 80% = $22,448
| Company A | |||||
| Schedule of Expected Cash Payments | |||||
| For the Year Ending December 30, 2010 | |||||
| Quarter | |||||
| 1 | 2 | 3 | 4 | Year | |
| Beginning AP | $2,350 | $2,350 | |||
| Quarter 1 Purchases (a) | 12,606 | $3,151 | 15,757 | ||
| Quarter 2 Purchases (b) | 9,702 | $2,426 | 12,128 | ||
| Quarter 3 Purchases (c) | 13,918 | $3,480 | 17,398 | ||
| Quarter 4 Purchases (d) | 22,448 | 22,448 | |||
| Total Expected Payments | $14,956 | $12,853 | $16,344 | $25,928 | $70,081 |
by Irfanullah Jan, ACCA and last modified on