don't give answer in image format Problem 14-20A (Static) Preparing a cash budget LO 14-5Fayette Medical Clinic has budgeted the following cash flows.Cash receiptsCash paymentsPor inventory purchasesPor S&A expensesJanuary February March$240,000 $232,000 $272,000Cash Budget220,00062,000Section 1: Cash receiptsBeginning cash balanceAdd: Cash receiptsTotal cash availableSection 2: Cash paymentsFor inventory purchasesFor S&A expensesInterest expense per monthFayette Medical had a cash balance of $16,000 on January 1. The company desires to maintain a cash cushion of $10,000. Funds areassumed to be borrowed, in increments of $2,000, and repaid on the last day of each month; the interest rate is 1 percent per month.Repayments may be made in any amount available. Fayette pays its vendors on the last day of the month also. The company had amonthly $80,000 beginning balance in its line of credit liability account from last year's quarterly results.RequiredPrepare a cash budget. (Any repayments should be indicated with a minus sign. Round intermediate and final answers to thenearest whole dollar amounts.)164,00064,000January16,000190,00054,000February$ 16,000 $16,000 $16,000March16,00016,000

Budget is the estimation of revenue and expenses prior to starting the operation. To manage the…

Answered: Problem 14-20A (Static) Preparing a…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter4: Internal Control And Cash

Section: Chapter Questions

Problem 66.2C

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CASH BUDGETING Rework problem 15-10 using a spreadsheet model. After completing parts a through d, respond to the following: If Bowers customers began to pay late, collections would slow down, thus increasing the required loan amount. If sales dedined, this also would have an effect on the required loan. Do a sensitivity analysis that shows the effects of these two factors on the maximum loan requirement. 15-10 CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2016 and 2017. May 2016 180,000 June 180,000 July 360,000 August 540,000 September 720,000 October 360,000 November 360,000 December 90,000 January 2017 180,000 Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale. 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: May 2016 90,000 June 90,000 July 126,000 August 882,000 September 306,000 October 234,000 November 162,000 December 90,000 General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depredation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2016. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal; and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if ail financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain. e. f. g. h.
Paul's Pool Service provides pool cleaning, chemical application, and pool repairs for residential customers. Clients are billed weekly for services provided and usually pay 40 percent of their fees in the month the service is provided, In the month following service, Paul collects 50 percent of service fees. The final 10 percent is collected in the second month following service. Paul purchases his supplies on credit, and pays 50 percent in the month of purchase and the remaining 50 percent in the month following purchase. Of the supplies Paul purchases, 85 percent is used in the month of purchase, and the remainder is used in the month following purchase. The following information is available for the months of June, July, and August, which are Paul's busiest months: • June 1 cash balance $14,800. • June 1 supplies on hand $4,000. • June 1 accounts receivable $8,300. • June 1 accounts payable $3,900. · Estimated sales for June, July, and August are $24,900, $37,400, and $39,900,…
Data Year 2 Quarter Year 3 Quarter 1 2 3 4 1 2 Budgeted unit sales 40,000 60,000 100,000 50,000 70,000 80,000 • Selling price per unit • Accounts receivable, beginning balance • Sales collected in the quarter sales are made • Sales collected in the quarter after sales are made • Desired ending finished goods inventory is • Finished goods inventory, beginning • Raw materials required to produce one unit • Desired ending inventory of raw materials is • Raw materials inventory, beginning • Raw material costs • Raw materials purchases are paid and • Accounts payable for raw materials, beginning balance $12 per unit $65,000 75% 25% 30% of the budgeted unit sales of the next quarter 12,000 units 5 pounds 10% of the next quarter's production needs 23,000 pounds $0.80 per pound 60% in the quarter the purchases are made 40% in the quarter following purchase $81,500 •Direct labor cost per hour •Direct labor hour per unit $15 per hour 0.2 hour per unit $2 per hour $60,000 •Variable MOH rate…
Problem 14-2OA (Static) Preparing a cash budget LO 14-5 Fayette Medical Clinic has budgeted the following cash flows. January February $240, 000 $232, e00 $272,000 March Cash receipts Cash payments For inventory purchases For SGA expenses 220,000 62, e00 164,000 64,000 190,000 54,000 Fayette Medical had a cash balance of $16,000 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are assumed to be borrowed, in increments of $2,000, and repaid on the last day of each month; the interest rate is 1 percent per month. Repayments may be made in any amount available. Fayette pays its vendors on the last day of the month also. The company had a monthly $80,000 beginning balance in its line of credit liability account from last year's quarterly results. Required Prepare a cash budget. (Any repayments should be indicated with a minus sign. Round intermediate and final answers to the nearest whole dollar amounts.)
Problem 5 Prepare a cash budget by month for the month quarter ending September 30, 2009, from the following data obtained from the Peninsula Co. Support your solution with schedules of estimated receipts & payments. August P 16,000 150,000 120,000 18,000 2,000 July P 12,000 110.000 90,000 Operating Expenses 15,000 September P 18,000 120,000 110,000 16,000 Cash sales Credit sales Purchases Interest expense Credit are collected 50% in the month of sales. 40% in the month following, 8% in the second month following and 2% uncollectible. Credit sales for May and June are expected to be P100,000 and P90,000 respectively. Purchases of merchandise, all on account are paid 60% in the month of purchase and 40% in the month fallowing. Purchase for June are estimated at 80,000 are paid in the month incurred. Cash balance on June 30, 2009 is P27,000.
QUESTION 4 REQUIRED Use the information provided below to prepare the following for Xpanda Limited for February and March 2022: 4.1 Debtors Collection Schedule 4.2 Cash Budget. INFORMATION The following budgeted information was made available by Xpanda Limited for 2022: 1. An overdrawn bank balance of R125 000 is expected on 31 January 2022. 2. Forty percent (40%) of all sales are for cash; the balance is on credit. Sales for January and February 2022 (excluding discounts) are expected to be R640 000 and R900 000 respectively. Sales are expected to increase by 10% during March 2022. Twenty percent (20%) of the cash sales are to wholesalers and they are entitled to a discount of 10%. Thirty percent (30%) of the sales on credit is expected to be collected in the month of the sale for a cash discount of 5%. The balance is expected to be collected one month later. 3. Xpanda Limited sells its goods at cost plus 60%. All goods that are sold each month are replaced in the same month. Fifty…
Question-4 REQUIRED Use the information provided by Empire Traders to prepare the following for March and April 2024: 4.1 Debtors Collection Schedule 4.2 Cash Budget. INFORMATION The following information was provided by Empire Traders: 1. Empire Traders expects to have a favourable bank balance of R60 000 on 28 February 2024. 2. Budgeted sales figures for 2024 are as follows: 3. 4. 5. 6. 7. Cash sales Credit sales 9. January R320 000 R370 000 Total purchases February R370 000 R390 000 March R310 000 R320 000 Thirty percent (30%) of the cash sales is to informal traders who are entitled to a discount of 10%. Collections from debtors are usually as follows: • 80% is collected in the month after the sale. 20% is collected two months after the sale. Purchases of inventory are expected to be as follows: January February R410 000 R460 000 April R250 000 R300 000 March R400 000 April R380 000 Sixty percent (60%) of the purchases is for cash to take advantage of a discount of 15%. The balance…
FAS: Problems for Budgeting Part 3 Cash Receipts Budget and Accounts Receivable Aging Schedule Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,780,000 Quarter 2 5,120,000 Quarter 3 6,660,000 Quarter 4 8,600,000 In Shalimar's experience, 10 percent of sales are paid cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,700,000 and for the fourth quarter of the current year are $7,210,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year 4, current year 1, next year 2, next year 3, next year 4, next year Construct a…
CHAPTER 4: THE CASH BUDGET 1. The Right Target, Inc., a marketing research and consulting firm, is working on a cash budget for July to December 2017. The staff has projected the following cash collections and payments: Collections Payments Cash Sales $10,000 Credit Sales Purchases $20,000 $15,000 July August $12,000 $24,000 $18,000 $28,000 $21,000 September $14,000 October $16,000 $32,000 $24,000 November $20,000 $40,000 December $25,000 $50,000 a) If the ending cash balance as of June 30, 2017 was $10,000, determine the firm's forecasted monthly cash balance. @ 2 W b) The staff at The Right Target, Inc. wants to know how much they would need to borrow each month if the minimum ending cash balance is $30,000 and the annual interest rate is 7%. c) Determine the impact on the ending cash balance if the firm uses any cash surplus above the required minimum cash balance to pay off its short-term borrowing monthly. S X command # Month 3 20 E D F3 C $ 4 gog R F4 F % 5 V 2 T G 6 B Y H & 7…
Assets Cash Minden Company Balance Sheet April 30 Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings Total liabilities and stockholders' equity $ 11, 100 72,500 37,500 238,000 $ 359,100 $ 68,000 19,400 180,000 91,700 $ 359,100 The company is in the process of preparing a budget for May and assembled the following data: a. Sales are budgeted at $255,000 for May. Of these sales, $76,500 will be for cash; the remainder will be credit sales. One-half of a month's credit sales are collected in the month the sales are made, and the remainder are collected in the following month. All of the April 30 accounts receivable will be collected in May. b. Purchases of inventory are expected to total $189,000 during May. These purchases will all be on account. Forty percent of all purchases are paid for in the month of purchase; the remainder are paid in the following…
Problem 7-17A (Algo) Preparing a sales budget and schedule of cash receipts LO 7-2 Thornton Pointers Corporation expects to begin operations on January 1, year 1, it will operate as a specialty sales company that sells laser pointers over the Internet. Thornton expects sales in January year 1 to total $400,000 and to increase 20 percent per month in February and March. All sales are on account. Thornton expects to collect 66 percent of accounts receivable in the month of sale, 24 percent in the month following the sale, and 10 percent in the second month following the sale. Required a. Prepare a sales budget for the first quarter of year 1. b. Determine the amount of sales revenue Thornton will report on the year 1 first quarterly pro forma income statement. c. Prepare a cash receipts schedule for the first quarter of year 1. d. Determine the amount of accounts receivable as of March 31, year 1. Complete this question by entering your answers in the tabs below. Required A Required B…
b. a. Prepare a schedule of cash payments for Fein Company for the month of August. OBJECTIVE 3 C. Exercise 9-45 Cash Budget The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following: Cash balance on June 1 is R7,360. b. Actual sales for April and May are as follows: d. F. a. April May Cash sales R180,000 Credit sales to 00 R530,000 Total sales R389,000 c. Credit sales are collected over a three-month period: R 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. d. Inventory purchases average 64% of a month's total B sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month. Salaries and wages total R117,500 per month, including a R45,000…

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