EXERCISE 8–7 Cash Budget [LO8–8] Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: [picture] The company’s beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Required: Prepare the company’s cash budget for the upcoming fiscal year Particulars 1Q 2Q 3Q 4Q Year Cash balance. Beginning           Add:Collection from customer           Total cash available           Less:Disbursement           Purchase of inventory           Selling and administrative expense           Equipment purchase           Dividends           Total disbursements           Excess/(Deficiency):           Over disbursement           Financing Borrowing           Repayment           Total financing           Cash Balance,ending

Exercise 20-19 (Algo) Schedule of cash payments LO P2 Zisk Company purchases direct materials on credit. Budgeted purchases are April, $89,000; May, $119,000; and June, $129,000. Cash payments for purchases are: 70% in the month of purchase and 30% in the first month after purchase. Purchases for March are $79,000. Prepare a schedule of cash payments for direct materials for April, May, and June. ZISK COMPANY Schedule of Cash Payments for Direct Materials Materials purchases Cash payments for: Total cash payments April May June

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3.3 Tutorial Questions 3.3.1 Cash Budget 1. A firm reported actual sales of RM65,000 in the month of June and RM70,000 in July. The sales forecasts indicate that sales are expected to be RM85,000, RM92,000 and RM95,750 for the months of August, September and October, respectively. Sales are 60% cash and 40% credit and credit sales are collected evenly over the following 2 month. No other cash receipts were received. What are the firm's expected cash receipts for the month August, September and October? . compile a cash disbursement

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Problem 8-23 Schedule of Expected Cash Collections; Cash Budget [LO8-2, LO8-8] The president of the retailer Prime Products has just approached the company’s bank with a request for a $51,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some difficulty in paying off its loans in the past, the loan officer has asked for a cash budget to help determine whether the loan should be made. The following data are available for the months April through June, during which the loan will be used:   On April 1, the start of the loan period, the cash balance will be $24,400. Accounts receivable on April 1 will total $151,200, of which $129,600 will be collected during April and $17,280 will be collected during May. The remainder will be uncollectible. Past experience shows that 30% of a month’s sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2%…

13 Problem 8-28 (Static) Cash Budget with Supporting Schedules [LO8-2, LO8-4, LO8-7, LO8-8] Westex Products is a wholesale distributor of industrial cleaning products. When the treasurer of Westex Products approached the company’s bank late in the current year seeking short-term financing, he was told that money was very tight and that any borrowing over the next year would have to be supported by a detailed statement of cash collections and disbursements. The treasurer also was told that it would be very helpful to the bank if borrowers would indicate the quarters in which they would be needing funds, as well as the amounts that would be needed, and the quarters in which repayments could be made. Because the treasurer is unsure as to the particular quarters in which bank financing will be needed, he has assembled the following information to assist in preparing a detailed cash budget:   Budgeted sales and merchandise purchases for next year, as well as actual sales and purchases…