Cash BudgetsComplete the followingThe following information represents Richard's Cash projections for part 2013 to 2014. Preparea cash budget for January to AprilPurchase Wages(Credit)MonthsSalesManufact Administ Sellinguring(Credit)rativeexpensesexpenses1150expenses1060201330000150003000500Nov.Dec.35000200003200122510405502014 Jan. 250001500025009901100600Feb.3000020000300010501150620March3500022500240011001220570April4000025000260012001180710Additional information in follows:i. The sales are two months after the sale.ii.A dividend of $ 15,000 is payable April.iii. A plant was bought in March for $ 3000.iv. Insurance was paid in March and April, payment will be done with in monthly instalments of $2,000 each.v. The creditors (purchases) are settled two months after the purchase was made (allowing a credit of2 months).vi. Wages are paid on the 1st of the next months.vii. All other expenses are paid one month later.viii. Balance of cash in hand on 1st Jan. 2013 is $ 25,000,

Budgeting - Budgeting is the process of estimating future operations based on past performance. %…

Answered: Cash Budgets Complete the following The…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter6: Managing Cash Flow

Section: Chapter Questions

Problem 11SEP

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A. Discuss the purpose of the cash budget. B. If the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might the excess cash be used?
A. Discuss the purpose of the cash budget. B. If the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might the excess cash be used?
A companys controller is adjusting next years budget to reflect the impact of an expected 3 percent inflation rate. Listed below are selected items from next years budget before the adjustment. After adjusting for the 3 percent inflation rate, what is the companys total budget for the selected items before taxes for next year? a. 858,150 b. 860,412 c. 810,971 d. 858,971
Budgeted selling and administrative expenses for King Tire Co. In P7-2 for the year ended December 31, 2016, were as follows: Required: 1. Prepare a selling and administrative expense budget, in good form, for the year 2016. 2. Using the information above and the budgets prepared in P7-2, prepare a budgeted income statement for the year 2016, assuming an income tax rate of 40%.
Relevant data from the Poster Companys operating budgets are: Additional data: Capital assets were sold in January for $10,000 and $4,500 in May. Dividends of $4,500 were paid in February. The beginning cash balance was $60,359 and a required minimum cash balance is $59,000. Use this information to prepare a cash budget for the first two quarters of the year
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 2019 and 2020: 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: General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation 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 2019. 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 all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.
Roman Inc. has the following totals from its operating budgets: Prepare a budgeted income statement for the year ended December 31, 2016, assuming that income from operations is taxed at a rate of 30%.
ONLY ANSWER QUESTION (B) the task of preparing the cash budget for the business for the quarter ending September 30, 2022. Your data collection has yielded the following:i) Extracts from the sales and purchases budgets are as follows:Month CashSales SalesOn Account CashPurchases PurchasesOn AccountMay $75,000 $480,000 $390,000June $135,000 $600,000 $36,000 $360,000July $86,800 $720,000 $61,700 $450,000August $105,600 $640,000 $68,800 $400,000September $112,500 $800,000 $77,250 $500,000ii) An analysis of the records shows that trade…
the task of preparing the cash budget for the business for the quarter ending September 30, 2022. Your data collection has yielded the following:i) Extracts from the sales and purchases budgets are as follows:Month CashSales SalesOn Account CashPurchases PurchasesOn AccountMay $75,000 $480,000 $390,000June $135,000 $600,000 $36,000 $360,000July $86,800 $720,000 $61,700 $450,000August $105,600 $640,000 $68,800 $400,000September $112,500 $800,000 $77,250 $500,000ii) An analysis of the records shows that trade receivables (accounts receivable)…
REQUIRED Use the information given below to answer the following questions: Prepare the Cash Budget for January, February and March Comment on the cash position of the company for the budgeted INFORMATION Some of the items in the Statement of Financial Position as at 31 December 2021 of Lomax Ltd are as follows: Current assets R Accounts receivable 1 300 000 Bank 235 000 Current liabilities Accounts payable (for material purchases) 95 000 Other current liabilities 700 000 The following forecasts have been made by Lomax Ltd for the first three months of 2022 for the bricks that it produces which are sold in pallets (with each pallet comprising 500 bricks): The sales manager anticipates the following credit sales: January February March 2 160 pallets 2 340 pallets 2 250 pallets The bricks are sold at a constant price of R500 per pallet. Ten percent (10%) of the sales are for cash and the rest is on credit. Debtors…
Using a separate columnar worksheet or Excel worksheet, prepare a Cash Budget by month for the quarter ending September 30, 2021, from the following data obtained from the CONSCIOÜNESS Company. Support your solution with schedules of estimated receipts and payments. August P 16,000 150,000 July September Cash Sales P 12,000 P 18,000 Credit Sales Purchases 110,000 120,000 90,000 120,000 110,000 Operating expenses Interest expense 15,000 18,000 16,000 2,000 Credit sales are collected 50% in the month of sales, 40% on 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 following. Purchases for June are estimated at P80,000. Expenses include depreciation of P2,000 monthly, and are paid in the month incurred. Cash balance on June 30, 2021.
Comment on the results of the shown cash budget prepared below, and suggest possible strategies the company must put in place to improve its cash position in the light of the plans to source a loan. Cash Budget Particular January February March April May June Opening Balance of Cash 1500000 1000000 -1250000 -15000000 -19237500 -3300000 Add: Receipt from Customer 15000000 15000000 16500000 20250000 25500000 29400000 Add: Sale of Freehold Premises 25000000 Total Cash available (A) 16500000 16000000 15250000 5250000 31262500 26100000 Less: Outflow of cash Material 5000000 6250000 7500000 10000000 9500000 11000000 Labor 8000000 8000000 8750000 10687500 9562500 9000000 Overhead 2500000 3000000 4000000 3800000 5500000 4400000 Purchase of new printing press 0 0 0 0 10000000 0 Corporation Tax due for Payment…

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