3. What if the recession led Shalimar's top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumedto be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.Shalimar CompanyCash Receipts BudgetFor the Coming YearQuarter 1 Quarter 2 Quarter 3 Quarter 4Cash sales$2$$Received on account from:Quarter 4, current yearQuarter 1, next yearQuarter 2, next yearQuarter 3, next yearQuarter 4, next yearTotal cash receipts$ Cash Receipts Budget and Accounts Receivable Aging ScheduleShalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales:Quarter 1$4,770,000Quarter 25,460,000Quarter 35,960,000Quarter 47,880,000In Shalimar's experience, 10 percent of sales are paid in 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 secondquarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,060,000 and for the fourth quarter of the current year are $7,050,000.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.QuarterCash SalesCredit Sales3, current year$4, current year1, next year2, next year3, next year4, next year2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. If an amount is zero, enter "0".Shalimar CompanyCash Receipts BudgetFor the Coming YearQuarter 1 Quarter 2 Quarter 3 Quarter 4Cash salesReceived on account from:Quarter 3, current yearQuarter 4, current yearQuarter 1, next yearQuarter 2, next yearQuarter 3, next yearQuarter 4, next yearTotal cash receiptsIII I.%24

Cash budget means the expected cash receipts and expected cash payment for the next year. Cash…

3. What if the recession led Shalimar's top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assu to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption. Shalimar Company Cash Receipts Budget For the Coming Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Cash sales Received on account from: Quarter 4, current year Quarter 1, next year Quarter 2, next year Quarter 3, next year Quarter 4, next year Total cash receipts

3. What if the recession led Shalimar's top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assu to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption. Shalimar Company Cash Receipts Budget For the Coming Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Cash sales Received on account from: Quarter 4, current year Quarter 1, next year Quarter 2, next year Quarter 3, next year Quarter 4, next year Total cash receipts

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mooney Equipment is putting together its cash budget for the following year and has forecasted expected cash collections over the next five quarters (one year plus the first quarter of the next year). The cash collection estimates are based on sales projections and expected collection of receivables. The sales and cash collection estimates are shown in the following table (in millions of dollars): Q1 Q2 Q3 Q4 Q5 Sales $1,100 $1,400 $1,450 $1,250 $1,500 Total cash collections $1,100 $1,150 $1,200 $1,200 You also have the following information about Mooney Equipment: • In any given period, Mooney’s purchases from suppliers generally account for 72% of the expected sales in the next period, and wages, supplies, and taxes are expected to be 15% of next period’s sales. • In the third quarter, Mooney expects to expand one of its plants, which will require an additional $1,072 million investment. • Every quarter, Mooney pays $60 million in interest and…
Problem 1. On a separate sheet of paper, prepare a cash budget for the first four months of 2006, showing the amount of cumulative excess cash (loan balance). Basic company has planned a cash budget for the first four months. Estimates show that P60,000 should be collected in January and April for the dividends to be received from investments in stock of other companies. Each month, operating expenses for wages, rents, lights and others estimated to be P100,000 plus 10% of the preceding month sales. Sales and collections on accounts receivables are estimated as follows: 50% collected in the month of sale 30% collected in the month following the sale 20% collected in the second month following the sale Payments for the merchandise purchased are scheduled so that 60% of the payments are made in the month of purchase with the balance paid the following month. The cash balance is estimated at P175,000 for January 1, 2006. Estimated net sales and purchases for the months are as follows: Net…
The fourth option is $16,600 needed, below $12,400 available.
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A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $8,000 to start each quarter. Required: Fill in the missing amounts. Note: Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign. Cash balance, beginning Add collections from customers 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 (including interest) * Total financing Cash balance, ending *Interest will total $1,000 for the year. $ 1 S 70 42 14 2 (8) Quarter (000 omitted) 2 3 52 32 8 2 94 10 103 30 17 2 14 4 34 2 (21) (000 omitted) Year 347 103 49
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3. Cash collection for month of February. SHOW WORK.