Francis and Company has planned a cash budget for the third quarter of 2004. The cash balance on July 1, 2004 is expected to be an overdraft of $82,000. Extracts from the sales and purchases budgets are as follows: Budgeted Sales Budgeted Purchases Month $800,000 $900,000 $750,000 $650,000 $800,000 May June $600,000 July August September $550,000 $450,000 $500,000 All sales are on credit and an analysis of the records shows that debtors settle according to the following pattern, in accordance with the credit terms 5/30, n90: i) 50% in the month of sale 30% in the month following sale 20% the following month All purchases are on credit and past experience shows that 80% are settled in the month of purchase in order to take advantage of a 10% prompt settlement discount. The balance will be disbursed in the month after purchase. The credit terms of the suppliers - 10/30, n60. Wages and salaries are expected to be $1,800,000 per annum and are paid monthly. ii) iii) Fixed operating expenses, which accrue evenly throughout the year, are estimated to be $2,400,000 per annum, (including depreciation on fixed assets of $60,000 per month) and is settled monthly. Taxation of $80,000 has to be settled in August. iv) v) The company is expected to receive settlement on an insurance claim of $50,000 in September. vi) vii) Interest on investment in other companies of $25,000 is expected in July 2004. viii) A short-term investment in JMMB Ltd. of $80,000 will be liquidated in September 2004. ix) The business has made arrangements with their bankers for a loan of $250,000. The loan will be disbursed in two tranches: July 1, 2004 November 1, 2004 $150,000 $100,000 Required: (a) Prepare a schedule of expected cash collections for sales for each of the months July to September. Prepare a schedule of expected cash disbursements for purchases for the quarter to September 30, 2004. Prepare a cash budget, with a total column, for the quarter ending September 20 200d (b) (c)

The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: September October November $89,000 $109,000 $146,000 37,000 47,000 31,000 33,000 Sales Manufacturing costs Selling and administrative expenses Capital expenditures The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of $34,000, marketable…

Music World reports the following budgeted sales: August, $170,000; and September, $200,000. Cash sales are 40% of total sales, and all credit sales are collected in the month following the sale. Prepare a schedule of cash receipts from sales for September. MUSIC WORLD Schedule of Cash Receipts from Sales Sales Cash receipts from: Total cash receipts September $ 200,000

Singal Inc. is preparing its cash budget. It expects to have sales of $32,500 in January, $50,000 in February, and $47,500 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March? a. $26,000 b. $47,500 c. $42,500 d. $72,000 e. $46,000

Deschambault Inc. is working on its cash budget for December. The budgeted beginning cash balance is $14,000. Budgeted cash receipts total $127,000 and budgeted cash disbursements total $126,000. The desired ending cash balance is $40,000. To attain its desired ending cash balance for December, the company needs to borrow: A. $40,000 B. $55,000 C. $25,000 D. $0