Cash Flow Budget Assumptions: Beginning balance is $20,000 Cost of goods sold is 80% of sales Building rent is $3,000 a month Accounts payable turnover ratio is 12 Accounts receivable ratio is 6 Inventory turnover ratio is 6 A quarter of sales are paid in cash Minimum cash balance is never less than $5,000

Cash Flow Budget Assumptions: Beginning balance is $20,000 Cost of goods sold is 80% of sales Building rent is $3,000 a month Accounts payable turnover ratio is 12 Accounts receivable ratio is 6 Inventory turnover ratio is 6 A quarter of sales are paid in cash Minimum cash balance is never less than $5,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...

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Question: 1. Based on the following data, how to prepare a cash budget (in proper form with labels) for July and August. Forecast sales May $12,000 cCash sales are 30% of total sales. Credit sales June 15,000 are collected as follows: 60% one month after the July $16,000 sale and 40% 2 months after the sale August $12,000 Accounts payable are paid 100% 2 months after the purchase Expected A/P May $5,000 In addition to purchases, there are utility June $6,000 bills of $1,500 each month July $7,000 August $8,000 Beginning cash for July is $3,800
Given the following, complete the table Cash Receipts increase by 4% every month. A Cash Disbursements is 60% of the total monthly cash receipts and The minimum cash balance per month is P 60,000. Cash Budget Jan Feb Mar Apr May Jun Cash Receipts P 77,000.00 Less: Cash Disbursements Net Cash Flow P 34,800.00 Add: Beginning Cash Ending Cash Less: Minimum Cash Balance Required Total Financing / Excess Cash Balance
1. Prepare a Cash budget from March to June based on the following information: Cash balance at end of March = Rs. 200000 Sales in January = 1000 units and expected to increase by 1000 units per month in the first 3 months and thereafter by 1500 units per month Selling price = Rs. 100 per units and is fixed after adding 20% to cost Cash sales are 25% of total sales Cash Purchases are 20% of total purchases 2% of Accounts Receivables are bad debt losses, 50% of good accounts receivables are collected in the month following sales and the rest in the next month 50% of credit purchases are paid in one month following purchases and the remaining in the second month No stock remains at end of the month Time lag in payment of wages is one-fourth of a month and that of Administrative expenses is half a month (Rs.) Jan Feb Mar Apr May June Wages 15000 20000 25000 28000 32000 36000 Administrative expenses (excluding depreciation) 18000 22000 26000…
A cash budget, by quarters, is given below for a retail company. (000 omitted) company requires a minimum cash balance of at least Br 5,000to start each quarter. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Cash balance, beginning 6 ? ? ? ? Add collections from customers ? ? 96 ? 323 Total cash available 71 ? ? ? ? Less disbursement: Purchase inventory 35 45 ? 35 ? Operating expense ? 30 30 ? 113 Equipment purchase 8 8 10 ? 36 Dividends 2 2 2 2 ? Total disbursement ? 85 ? ? ? Excess (deficiency) of each cash (2) ? 11 ? ? Financing: Borrowing ? 15 - - ? Repayments (including interest) - - ? (17) ? Total financing ? ? ? ? ? Cash balance, ending ? ? ? ? ?
develop a dynamic 12-month cash flow budgeting/forecasting tool. Initial sales of $1,000,000 with forecasted monthly growth 2% 20% of sales are collected in month of sale. 40% of sales are collected the following month. 25% collected 2 months later 18% collected 3 months later 2% never collected Initial cash balance of $300,000
Reck Chocolates reports the following information from its sales budget: Expected Sales amount: July RM 97,000 August RM117,000 September RM127,000 Cash sales are normally 30% of total sales and all credit sales are expected to be collected in the month following the date of sale. The total amount of cash expected to be received from customers in September is: a.120,000. b.38,100. c.127,000. d.81,900. e.208,900.
1.Based on the following data, prepare a cash budget (in proper form with labels) for July and August. Forecast sales May $12,000 June 15,000 July $16,000 August $12,000 Cash sales are 30% of total sales. Credit sales are collected as follows: 60% one month after the sale and 40% 2 months after the sale Accounts payable are paid 100% 2 months after the purchase Expected A/P May $5,000 June $6,000 July $7,000 August $8,000 In addition to purchases, there are utility bills of $1,500 each month Beginning cash for July is $3,800
Garden Depot Is a retailer that provided the following budgeted cash flows for next year. 1st Quarter 2nd Quarter $410,000 $ 260,000 $ 316,000 $ 286,000 3rd Quarter $ 290,000 $ 276,000 Total cash receipts Total cash disbursements The company's beginning cash balance for next year will be $36,000. The company requires a minimum cash balance of $10,000 and may borrow money at the beginning of any quarter and may repay any part of its loans at the end of any quarter. Interest payments, based on a quarterly Interest rate of 3%, are due on any principal at the time it is repaid. For simplicity, assume Interest is not compounded. Required: Prepare the company's cash budget for next year. Note: Repayments, Interest, and cash deficiencies should be indicated by a minus sign. Beginning cash balance Total cash receipts Total cash available Total cash disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings Repayments Interest Total financing Ending cash balance…
Clay Co.'s projected sales are as follows: August $400,000 September $450,000 October $550,000 Clay estimates that it will collect 30% in the month of sale, 50% in the month after the sale, and 18% in the second month following the sale. Two percent of all sales are estimated to be bad debts. Instructions: How much are Clay Co.'s budgeted cash receipts for October?
Relevant data from the operating budget of The Framers are: quarter 1 quarter 2 Sales $35,000 76,000 Direct Material purchases 25,000 26,000 Direct labor 30,000 24,000 Manufacturing OH 9,000 10,000 Selling & Admin 20,000 20,000 Depreciation included in Selling & Admin 1000 1,000 Cash Collections 34,000 76,000 Cash payments 29,000 20,000 Cash received: other 8,000 500 Dividend 0 500 Other data: Capital assets were sold in quarter 1 and $8,000 was collected in quarter 1 and $500 collected in quarter 2. Dividends of $500 will be paid in May. The beginning cash balance was $40,000 and a required minimum cash balance is $8,000. Prepare a cash budget for the first two quarters of the year.
The projected sales for the Leeds Company is given below. The company has determined that all sales are on credit and they do not have any cash sales. For the credit sales, experience tells Leeds they will collect 60% of sales in the quarter of the sale and the remaining 40% is collected the quarter after the sale. The sales in the last quarter of the previous year is $200,000. Qtr 1 Qtr 2 Qtr 3 Qtr 4 Budgeted Sales S600,000 S1,600,000 S800,000 S1,000,000 Leeds need cash to pay for purchases, wages, rent, interest, income taxes, cash dividends, and most other expenses. Leeds Company is a manufacturing company, the material purchases requirement for the next four quarters is given in the following table. Leed Company makes all material purchases on credit. Leed Company will pay for material purchases 80% in the quarter of purchase and 20% in the quarter after the purchase. The materials purchased in the last quarter of previous years is $400,000. Budgeted Material Purchases $250,000…
Estimated sales Sales Purchases Ending inventory Administrative salaries Marketing expense Sales commissions Rent expense Depreciation expense Utilities Taxes 15%*** *of next month's sales **of sales ***of income before taxes Sales are expected to increase each month by 10%. Prepare a budgeted income statement. $560,000 567,923 294,823 50,320 7,500 1,100 2,500 10%* 5%** 2%**