Fundamentals of Corporate Finance
11th Edition
ISBN: 9780077861704
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Chapter 18, Problem 11QP
Calculating the Cash Budget [LO3] Here are some important figures from the budget of Nashville Nougats, Inc., for the second quarter of 2015:
![Chapter 18, Problem 11QP, Calculating the Cash Budget [LO3] Here are some important figures from the budget of Nashville , example 1](http://dev-ingestion-image-output.s3-website-us-east-1.amazonaws.com/9780077861704/Chapter-18/images/61704-18-11qp-question-digital_image_001.png)
The company predicts that 5 percent of its credit sales will never be collected, 35 percent of its sales will be collected in the month of the sale, and the remaining 60 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase.
In March 2015, credit sales were $235,000 and credit purchases were $161,300. Using this information, complete the following cash budget:
![Chapter 18, Problem 11QP, Calculating the Cash Budget [LO3] Here are some important figures from the budget of Nashville , example 2](http://dev-ingestion-image-output.s3-website-us-east-1.amazonaws.com/9780077861704/Chapter-18/images/61704-18-11qp-question-digital_image_002.png)
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Q8) Prepare a cash budget for the first quarter for Shamz Logistics Inc., given the following data. Management has projected total and credit sales for the first three months of 2016 in the given table. Based on historical data, 40% of credit sales are collected in the month the sales were made, and 60% are collected the next month. Purchases are estimated to be 50% of the next month’s total sales, but are paid for in the month following the order. (Expenditure for inventory in each month is 50% of that month’s sales.) The beginning and target cash balance is $250,000.
Month
Year
Credit sales
December
2015
170,000
January
2016
160,000
February
2016
178,000
march
2016
185,000
Item
January
February
March
Wages
25,000
29,000
29,000
Rent
2,700
2,700
2,700
Other
1,000
1,200
1,400
Taxes
15,000
--
--
Dividend
--
--
4,000
Cap. Ex.
--
5,000
--
Jireh Fabrication Company is in the process of preparing the
cash budget for the last four months of 2015 that is September to
December. The following information has been made available.
i. Projected sales
Sept.
Oct.
Nov.
Dec.
Quantity (units) 60000
65000
65000
70000
ii. Selling price is GH¢10 per unit but expected to drop by 5%
from 1st November.
iii. Payment for goods sold is as follows; 20% in the month of
sales, 60% the following month after sales and the
balance in the second month after sales. Bad debt is
estimated at 2% of sales value.
iv. Purchases of goods at GH¢6 per unit are as follows:
September 70000 units, October 70000units, November
72000 units and December 65000 units.
v. Goods purchased are paid one month in arrears.
vi. Monthly expenses estimated at 12% on sales revenue are
paid in the month of incurrence
vii. The company plans to buy a delivery van at GH¢270000,
40% of the cost to be paid in October and the balance in
January 2015.
viii. The Director withdraws…
Use the information provided below to prepare the Cash Budget for January and February 2023:INFORMATIONThe following information was provided by Intel Enterprises:1. The bank balance on 31 December 2022 is expected to be R40 000 (unfavourable).2. Credit sales are expected to be as follows:December 2022 - R576 000 January 2023 - R540 000 February 2023 - R648 0003. Credit sales usually make up 40% of the total sales. Cash sales make up the balance. Cash customersreceive a 10% discount.4. Credit sales are normally collected as follows:* 30% in the month in which the transaction takes place, and these customers are entitled to a 5% discount.* 65% in the following monthThe rest is usually written off as bad debts.5. Budgeted purchases of inventory are as follows:December 2022 - R1 000 000 January 2023 - R800 000 February 2023 - R920 0006. Fifty percent (50%) of the purchases are for cash. The remainder is paid in the month after the purchase.7. The monthly salaries amount to R150 000.…
Chapter 18 Solutions
Fundamentals of Corporate Finance
Ch. 18.1 - What is the difference between net working capital...Ch. 18.1 - Prob. 18.1BCQCh. 18.1 - List five potential sources of cash.Ch. 18.1 - Prob. 18.1DCQCh. 18.2 - Prob. 18.2ACQCh. 18.2 - Prob. 18.2BCQCh. 18.2 - Prob. 18.2CCQCh. 18.3 - What keeps the real world from being an ideal one...Ch. 18.3 - What considerations determine the optimal size of...Ch. 18.3 - Prob. 18.3CCQ
Ch. 18.4 - Prob. 18.4ACQCh. 18.4 - Prob. 18.4BCQCh. 18.5 - Prob. 18.5ACQCh. 18.5 - Describe two types of secured loans.Ch. 18.6 - Prob. 18.6ACQCh. 18.6 - In Table 18.6, what would happen to Fun Toys...Ch. 18 - Prob. 18.1CTFCh. 18 - A firm has an operating cycle of 64 days and a...Ch. 18 - Prob. 18.4CTFCh. 18 - Prob. 18.5CTFCh. 18 - Operating Cycle [LO1] What are some of the...Ch. 18 - Prob. 2CRCTCh. 18 - Prob. 3CRCTCh. 18 - Cost of Current Assets [LO2] Loftis Manufacturing,...Ch. 18 - Operating and Cash Cycles [LO1] Is it possible for...Ch. 18 - Use the following information to answer Questions...Ch. 18 - Use the following information to answer Questions...Ch. 18 - Prob. 8CRCTCh. 18 - Use the following information to answer Questions...Ch. 18 - Use the following information to answer Questions...Ch. 18 - Changes in the Cash Account [LO4] Indicate the...Ch. 18 - Prob. 2QPCh. 18 - Changes in the Operating Cycle [LO1] Indicate the...Ch. 18 - Prob. 4QPCh. 18 - Calculating Cash Collections [LO3] The Morning...Ch. 18 - Prob. 6QPCh. 18 - Prob. 7QPCh. 18 - Calculating Payments [LO3] Sedman, Corp., has...Ch. 18 - Calculating Payments [LO3] The Torrey Pine...Ch. 18 - Calculating Cash Collections [LO3] The following...Ch. 18 - Calculating the Cash Budget [LO3] Here are some...Ch. 18 - Prob. 12QPCh. 18 - Prob. 13QPCh. 18 - Prob. 14QPCh. 18 - Calculating the Cash Budget [LO3] Wildcat, Inc.,...Ch. 18 - Prob. 16QPCh. 18 - Costs of Borrowing [LO3] In exchange for a 400...Ch. 18 - Prob. 18QPCh. 18 - Prob. 1MCh. 18 - Prob. 2MCh. 18 - Prob. 3M
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