FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- A company is preparing its cash budget for the upcoming quarter. The company's sales are expected to be $500,000 in January, $600,000 in February, and $700,000 in March. The company's cost of goods sold is 60% of sales. The company's beginning cash balance is $50,000, and the company desires to maintain a minimum cash balance of $25,000. How much financing does the company need in February? $25,000 $60,000 $0 $35,000arrow_forwardMotors Corporation manufactures motors for dirt bikes. The company requires a minimum $30,000 cash balance at each month-end. If necessary, the company borrows to meet this requirement at a cost of 3% interest per month (paid at the end of each month). Any preliminary cash balance above $30,000 at month-end is used to repay loans. The cash balance on July 1 is $43,000, and the company has no outstanding loans. Budgeted cash receipts and budgeted cash payments (other than for interest on the loan and loan activity) follow. July Cash receipts Cash payments $ 94,000 122,000 August September $120,000 108,900 $ 159,000 136,400 Prepare a cash budget for July, August, and September. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar. Answer is not complete. MOTORS CORPORATION Cash Budget July August September Beginning cash balance $ 43,000 $ 30,000 $ 30,000 Add: Cash receipts 94,000 120,000…arrow_forwardCheddar's Café is preparing its cash budget for August. At the beginning of the month, the café expects to have $17,500 in total available cash. Over the course of the month, it expects to make $12,250 in cash disbursements and obtain $3,750 in financing. What is Cheddar's anticipated ending cash balance for August? O $9,000 O $5,250 O $26,000 O $1,500arrow_forward
- Western Company is preparing a cash budget for June. The company has $10,400 in cash at the beginning of June and anticipates $31,600 in cash receipts and $37,700 in cash payments during June. Western Company has an agreement with its bank to maintain a minimum cash balance of $10,000. As of May 31, the company has no loans outstanding. To maintain the $10,000 required balance, during June the company must:arrow_forwardUrban Industries needs to maintain a minimum cash balance of $10,000 and has entered into an agreement with their bank to accomplish this. Urban is preparing a cash budget for September. Urban has $11,300 in cash at the beginning of September and anticipates $30,700 in cash receipts and $35,900 in cash payments during September. As of August 31, the company has no loans outstanding. To maintain the $10,000 required balance, during September the company must: O A. Borrow $3,900. O B. Borrow $10,000. OC. Borrow $5,200. OD. Repay $3,900. OE.Repay $6.100.arrow_forwardFoyert Corporation requires a minimum $7,000 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid at the end of each month). Any preliminary cash balance above $7,000 is used to repay loans at month-end. The cash balance on October 1 is $7,000, and the company has an outstanding loan of $3,000. Budgeted cash receipts (other than for loans received) and budgeted cash payments (other than for loan or interest payments) follow. (please see picture for other info) October November December Cash receipts $ 23,000 $ 17,000 $ 21,000 Cash payments 25,500 16,000 15,000 Prepare a cash budget for October, November, and December.arrow_forward
- How would this be solved ?arrow_forwardSantos Company is preparing a cash budget for February. The company has $15,000 cash at the beginning of February and budgets $72,000 in cash receipts from sales and $105,000 in cash payments during February. Prepare the cash budget for February assuming the company maintains a $5,000 minimum cash balance and will take a loan if necessary to maintain this balance. The company has no loans outstanding on February 1. (Negative cash balances, if any, should be indicated with minus sign.) SANTOS COMPANY Cash Budget Beginning cash balance Total cash available Preliminary cash balance Loan activity Ending cash balance Loan balance, end of month Februaryarrow_forwardKayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. January February March Cash Receipts Cash payments $ 525,000 400,000 450,000 $ 475,000 350,000 525,000 Kayak requires a minimum cash balance of $30,000 at each month-end. Loans taken to meet this requirement charge 1% interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $30,000 is used to repay Ibans at month-end. The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1. Prepare monthly cash budgets for January, February, and March Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Beginning cash balance Add Cash receipts Total cash available Less Cash payments for Interest on loan Total…arrow_forward
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