Answered: Develop (in Excel) an enterprise budget…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter1: Introduction To Managerial Accounting

Section: Chapter Questions

Problem 15E: Ethical Behavior Consider the following scenario between Dave, a printer, and Steve, an assistant in...

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I am just confused about how to solve this problem because it was never addressed in class so any help would be really beneficial, thank you!

The question is based on the orginial information stated in the image.

Now, Assume that you start out on January 1 of 2024 with $35,000.00 cash in the bank, and a 0 operating loan balance and you plant 1000 acres of No-Till soybeans (all on cash rented land). Assume your enterprise budget projections are correct. Develop a monthly cash flow budget from January of 2024 through December of 2024 to track the timing of cash inflows and outflows, and the resulting required operating loan balances at the end of each month. Use the “OSU Cash Flow Blank Template available on the class website for this exercise. Assume that you need to maintain a $5,000.00 balance in your cash account. Also assume that you have other sources of income to fund family living, so you do not actually take the operator labor charge out of the wheat enterprise. Assume 8.0% interest on your operating loan. The template will calculate your operating loan balance for you every month, and will pay it off when you have excess cash above your $5,000.00 minimum, and will pay the accrued interest on the operating loan when there are enough excess funds to pay off the operating loan and the interest (all of those calculations are done for you). So, to start, scroll down the “B” column to the appropriate yellow input cells and put in the $35,000.00 beginning cash balance, the $5,000.00 minimum cash balance, and the 8.0% interest rate on the operating loan (enter as a whole number 8, not decimal form).

Develop your cash flow in the Excel template (OSU Cash Flow Blank Template).
If you divide your total operating loan interest cost that the cash flow spreadsheet calculated for you (Hint, it is automatically assumed to be paid in October in the cash flow template) by 1000 acres, why do you get a number that is different than the $17.00 per acre estimated in the enterprise budget?
What would be the beginning cash balance this farm would start the following season with if this projection turns out to be accurate?

Develop (in Excel) an enterprise budget for a proposed 2024 No-Till soybean enterprise based on the following
assumptions: For this exercise I want you to develop your own spreadsheet (not use an already programmed
template). You can, however, look at an already created template for guidance if you want.
Yield, 40 bushels per acre; assumed price, $11.50 per bushel, soybeans to be sold in October of 2024.
Costs:
Herbicide application
Seed
Planting costs (custom)
Fertilizer + application
$45.00
O per acre total, half in April of 2024, and half in June of 2024
$43.00 per acre in March of 2024
$21.00 per acre in April of 2024
$45.00 per acre in March of 2024
Other Pesticides + application $15.00 per acre in July of 2024
Land Rent
Operator labor and mgmt.
Crop ins premium
Harvest (custom)
Interest
Overhead
$60.00 per acre in January of 2024
$25.00 per acre opportunity cost, not paid directly
$18.00 per acre in August of 2024
$38.00 per acre in October of 2024
$17.00 per acre in December of 2024
$6.00 per acre in November of 2024

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