The cash budget for the first three quarters of the a company is given below (000 omitted). The company requires a minimum cash balanc if necessary, the company will borrow money from its bank to maintain this balance. The company will pay no interest in Quarters 1, 2, and 3. It will repay as much of its borrowings as possible as soon as it has more than $5,000 in cash in a given quarter. Suppose the company starts the first quarter with no bank debt. How much total bank debt does the company expect to have at the end of the third quarter? Cash Budget Quarter (000 omitted) 1 2 3 $9 ? Cash balance, beginning Add collections from customers 88 128 Total cash available Less disbursements: Purchase of inventory Selling and administrative expenses Equipment purchases Dividends Total disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Total financing Cash balance, ending ? 55 41 9 2 7 Y 7 ? 65 45 9 2 7 ? 7 ? 1982 88 ? 65 48 12 2 7 7 ? 7

The cash budget for the first three quarters of the a company is given below (000 omitted). The company requires a minimum cash balanc if necessary, the company will borrow money from its bank to maintain this balance. The company will pay no interest in Quarters 1, 2, and 3. It will repay as much of its borrowings as possible as soon as it has more than $5,000 in cash in a given quarter. Suppose the company starts the first quarter with no bank debt. How much total bank debt does the company expect to have at the end of the third quarter? Cash Budget Quarter (000 omitted) 1 2 3 $9 ? Cash balance, beginning Add collections from customers 88 128 Total cash available Less disbursements: Purchase of inventory Selling and administrative expenses Equipment purchases Dividends Total disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Total financing Cash balance, ending ? 55 41 9 2 7 Y 7 ? 65 45 9 2 7 ? 7 ? 1982 88 ? 65 48 12 2 7 7 ? 7

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter22: Master Budget (master)

Section: Chapter Questions

Problem 3R: Review the completed master budget and answer the following questions: Is Ranger Industries...

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