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

See similar textbooks

Similar questions

1. A firm's peak borrowing needs will probably be overstated if it bases its monthly cash budget on the assumption that both cash receipts and cash payments occur uniformly over the month but in reality payments are concentrated at the beginning of each month at each and every time. * O True O False
Show Me How Personal budget At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) Purchase season football tickets in September Additional entertainment for each month Pay fall semester tuition in September Pay rent at the beginning of each month Pay for food each month Pay apartment deposit on September 2 (to be returned December 15) Part-time job earnings each month (net of taxes) Line Item Description Estimated cash receipts from: Part-time job Deposit a. Prepare a cash budget for September, October, November, and December. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments. Craig Kovar Cash Budget For the Four Months Ending December 31 Total…
A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $4,000 to start each quarter. Fill in the missing amounts. Note: Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign. Quarter (000 omitted) (000 omitted) 1 2 3 4 Year Cash balance, beginning $ 7 Add collections from customers 109 392 Total cash available 89 Less disbursements: * Purchase of inventory 48 58 32 Selling and administrative expenses 45 30 127 Equipment purchases 11 9 23 53 Dividends 2 2 2 2 Total disbursements 114 Excess (deficiency) of cash available over disbursements (2) 7 Financing: Borrowings Repayments (including interest) * Total financing Cash balance, ending "Interest will total $1,000 for the year. 18 (22)
The company provides the following information regarding the cash budget for next year: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Beginning cash balance $5,000 $5,000 $5,000 $5,000 Excess (Deficiency) ($3,000) $2,000 ($2,500) $1,000 The company's policy is to start each quarter with a cash balance of $5,000.The company has access to a line of credit in the amount of $50,000 for any short term borrowing needs and pays the loans off as quickly as possible.The company assumes the cash budget for the year will begins with no loans.What is the expected loan balance at the end of Quarter 2 (ignore interest)?
Here are some important figures from the budget of Nashville Nougats, Incorporated, for the second quarter of 2022: April May June $399,000$ 348,000 $436,000 176,000 164,000 197,000 Credit sales Credit purchases Cash disbursements Wages, taxes, and expenses Interest Equipment purchases Beginning cash balance Cash receipts The company predicts that 5 percent of its credit sales will never be collected, 30 percent of its sales will be collected in the month of the sale, and the remaining 65 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase. In March 2022, credit sales were $326,000. Cash collections from credit sales Total cash available Cash disbursements Using this information, complete the following cash budget. Note: Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32. Purchases Wages, taxes, and expenses Interest Equipment purchases 79,400 9,100 31,500 Total cash…
7. Prepare a cash collection schedule for June, July, and August. Viking’s cash sales are insignificant. They collect 40% of their sales in the month of sale, 30% in the month after, 10% two months after, and then the remainder is written off. Prepare your budgets using Excel
bapu
4. Northern Company's budgeted sales for the coming year are P40.5 million of which 80% are expected to be credit sales at terms of n/30. Northern estimates that a proposes relaxation of credit standards would increase credit sales by 20% and increase the average collection period form 30 days to 40 days. Based on a 360-day year, the proposed relaxation of credit standards would result in an expected increase in the average accounts receivable balance of how much?
Prepare Cash Budget(Show Interest calculation) What is a self imposed budget and what is the advantage of self imposed budget and why sales is considered as the starting point of all budget
i need the answer quickly
A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash ba of $7,000 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 Quarter (000 omitted) (000 omitted) 1 2 3 4 Year Cash balance, beginning $ 7 $ 7 Add collections from customers 84 88 105 378 Total cash available 91 95 Less disbursements: Purchase of inventory 44 54 28 Selling and administrative expenses Equipment purchases 41 32 30 124 8 8 19 45 Dividends 2 2 2 2 Total disbursements 95 96 Excess (deficiency) of cash available over disbursements (2) (1) 12
A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $3,000 to start each quarter. Required: Fill in the missing amounts. (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. Quarter 1 (000 omitted) $ 9 97 54 7 2 (5) Quarter 2 (000 omitted) 64 45 9 2 120 12 Quarter 3 (000 omitted) 124 30 29 2 12 Quarter 4 (000 omitted) 30 2 (12) Year (000 omitted) 431 137 55