Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 14, Problem 13E
Exercise 7-13A Preparing a
The accountant for Jean’s Dress Shop prepared the following cash budget. Jean’s desires to maintain a cash cushion of $10,000 at the end of each month. Funds are assumed to be borrowed and repaid on the last day of each month. Interest is charged at the rate of 1 percent per month.
Cash Budget | July | August | September |
Section 1: Cash receipts | |||
Beginning cash balance | $25,000 | $ ? | $ ? |
Add cash receipts | 90,000 | 100,000 | 120,300 |
Total cash available (a) | 115,000 | ? | ? |
Section 2: Cash payments | |||
For inventory purchases | 82,750 | 70,115 | 87,076 |
For S&A expenses | 27,250 | 30,280 | 30,716 |
For interest expense | 0 | ? | ? |
Total budgeted disbursements (b) | 110,000 | ? | ? |
Section 3: Financing activities | |||
Surplus (shortage) | 5,000 | ? | ? |
Borrowing (repayments) (c) | 5,000 | ? | ? |
Ending cash balance (a − b + c) | $10,000 | $ 10,000 | $ 10,000 |
Required
- a. Complete the cash budget by filling in the missing amounts. Round all computations to the nearest whole dollar.
- b. Determine the amount of net cash flows from operating activities Jean’s will report on the third quarter pro forma statement of cash flows.
- c. Determine the amount of net cash flows from financing activities Jean’s will report on the third quarter pro forma statement of cash flows.
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b.
a.
Prepare a schedule of cash payments for Fein Company for
the month of August.
OBJECTIVE 3
C.
Exercise 9-45 Cash Budget
The owner of a building supply company has requested a
cash budget for June. After examining the records of the
company, you find the following:
Cash balance on June 1 is R7,360.
b. Actual sales for April and May are as follows:
d.
F.
a.
April
May
Cash sales
R180,000
Credit sales
to 00
R530,000
Total sales
R389,000
c. Credit sales are collected over a three-month period: R
40% in the month of sale, 30% in the second month, and
20% in the third month. The sales collected in the third
month are subject to a 2% late fee, which is paid by those
customers in addition to what they owe. The remaining
sales are uncollectible.
d. Inventory purchases average 64% of a month's total B
sales. Of those purchases, 20% are paid for in the month
of purchase. The remaining 80% are paid for in the
following month.
Salaries and wages total R117,500 per month, including a
R45,000…
Question 2
A. The Rilex and Chill Coffee Shop has requested a cash budget for August. After
examining the records of the company, you find the following:
1.
Cash balance on 1 August is RM43,280.
2. Actual sales for June and July are as follows:
June
RM
Cash sales
Credit sales
Total sales
10,200
26,100
36,300
July
RM
14,700
33,900
48,600
3. Credit sales are collected over three months: 30% in the month of sales, 40% in the
second month, and 25% in the third month. The customers who paid in the month of
sales are qualified for 3% discounts on the amount owed. While the sales collected in the
third month are subject to a 2% late fee, which is paid by those customers in addition to
what they owe. The remaining sales are uncollectible.
4. Inventory purchases average 80% of a month's total sales. Of those purchases, 60% are
paid for in the month of purchase. The remaining 40% is paid for in the following month.
5.
Salaries and wages total RM13,800 per month.
6. The company received interest…
Book
Hint
Print
Exer
Kayak 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
$ 521,000
$ 465,600
405,000
478,000
349,600
522,000
Kayak requires a minimum cash balance of $40,000 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 $40,000 is used to repay loans at month-end. The company has a cash balance of $40,000 and a loan balance
of $80,000 at January 1.
Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should
be indicated with minus sign.)
Chapter 14 Solutions
Survey Of Accounting
Ch. 14 - Prob. 1QCh. 14 - Prob. 2QCh. 14 - 3.What are the three levels of planning? Explain...Ch. 14 - 4.What is the primary factor that distinguishes...Ch. 14 - 5.What is the advantage of using a perpetual...Ch. 14 - Prob. 6QCh. 14 - Prob. 7QCh. 14 - 8. Ken Shilov, manager of the marketing...Ch. 14 - Prob. 9QCh. 14 - 10.What is the normal starting point in developing...
Ch. 14 - 11. How does the level of inventory affect the...Ch. 14 - 12.What are the components of the cash budget?...Ch. 14 - 13.The primary reason for preparing a cash budget...Ch. 14 - 14.What information does the pro forma income...Ch. 14 - 15.How does the pro forma statement of cash flows...Ch. 14 - Exercise 7-1A Budget responsibility Teresa...Ch. 14 - Exercise 7-2A Preparing a sales budget Parliament...Ch. 14 - Prob. 3ECh. 14 - Exercise 7-4A Preparing sales budgets with...Ch. 14 - Exercise 7-5A Determining cash receipts from...Ch. 14 - Exercise 7-6A Using judgment in making a sales...Ch. 14 - Exercise 7-7A Preparing an inventory purchases...Ch. 14 - Exercise 7-8A Preparing a schedule of cash...Ch. 14 - Exercise 7-9A Determining the amount of expected...Ch. 14 - Exercise 7-10A Preparing inventory purchases...Ch. 14 - Exercise 7-11A Preparing a schedule of cash...Ch. 14 - Prob. 12ECh. 14 - Exercise 7-13A Preparing a cash budget The...Ch. 14 - Exercise 7-14A Determining amount to borrow and...Ch. 14 - Prob. 15ECh. 14 - Problem 7-16A Behavioral impact of budgeting...Ch. 14 - Prob. 17PCh. 14 - Problem 7-18A Preparing an inventory purchases...Ch. 14 - Prob. 19PCh. 14 - Problem 7-21A Preparing a cash budget Fayette...Ch. 14 - Prob. 21PCh. 14 - Problem 7-22A Preparing budgets with multiple...Ch. 14 - Problem 7-23A Preparing a master budget for retail...Ch. 14 - ATC 7-1 Business Applications Case Preparing and...Ch. 14 - ATC7-2 Group Assignment Master budget and pro...Ch. 14 - ATC 7-4 Writing Assignment Continuous budgeting...Ch. 14 - Ethical Dilemma Bad budget system or unethical...
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