Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 9, Problem 9.16E
The controller of Trenshaw Company wants to improve the company’s
| June 30, 2017, cash balance | $45,000 |
| Dividends to be declared on July 15* | 12,000 |
| Cash expenditures to be paid in July for operating expenses | 40,800 |
| Amortization expense in July | 4,500 |
| Cash collections to be received in July | 90,000 |
| Merchandise purchases to be paid in cash in July | 56,200 |
| Equipment to be purchased for cash in July | 20,000 |
*Dividends are payable 30 days after declaration to shareholders of record on the declaration date.
Trenshaw Company wants to keep a minimum cash balance of $25,000.
Instructions
(a) Prepare a cash budget for the month ended July 31, 2017, and indicate how much money, if any, Trenshaw Company will need to borrow to meet its minimum cash requirement.
(b) Explain how cash budgeting can reduce the cost of short-term borrowing.
(CGA adapted)
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The controller of Arrowroot Company wishes to improve the company’s control system by preparing a monthly cash budget. The following information relates to the month ending July 31, 2021:
June 30, 2021, cash balance
$
122,000
Dividends were declared on June 15*
40,000
Cash expenditures to be paid in July for operating expenses
81,600
Depreciation expense
12,200
Cash collections to be received
194,000
Merchandise purchases to be paid in cash
120,400
Equipment to be purchased for cash
45,800
Arrowroot Company wishes to maintain a minimum cash balance of
62,000
*Dividends are payable to shareholders of record on declaration date, 30 days after declaration.
Required:
1. Prepare a cash budget for the month ended July 31, 2021, indicating how much, if anything, Arrowroot will need to borrow to meet its minimum cash requirement. Leave no cells blank - be certain to enter "0" wherever required
The controller of Ultramint Company wishes to improve the company's control system by
preparing a monthly cash budget. The following information relates to the month ending July
31, 2008.
June 30, 2008 cash balance ...
Dividends to be declared on July 15*
Cash expenditures to be paid in July for operating expenses
Amortization expense....
Cash collections to be received ...
$ 90,000
24,000
73,600
9,000
178,000
112,400
41,000
50,000
Merchandise purchases to be paid in cash
Equipment to be purchased for cash. ……..
Ulramint Company wishes to maintain a minimum cash balance of ....
*Dividends are payable to shareholders of record on declaration date, 30 days after declaration.
Required:
Prepare a cash budget for the month ended July 31, 2008, indicating how much, if anything,
Ultramint will need to borrow to meet its minimum cash requirement.
The controller of Optimum wishes to improve the company’s control system by preparing a monthly cash budget. The following information relates to the month ending July 31, 2021:
June 30, 2021, cash balance
$
130,000
Dividends were declared on June 15*
44,000
Cash expenditures to be paid in July for operating expenses
83,600
Depreciation expense
13,000
Cash collections to be received
198,000
Merchandise purchases to be paid in cash
122,400
Equipment to be purchased for cash
47,000
Optimum wishes to maintain a minimum cash balance of
70,000
*Dividends are payable to shareholders of record on declaration date, 30 days after declaration.
Required:
1. Prepare a cash budget for the month ending July 31, 2021, indicating how much, if anything, Optimum will need to borrow to meet its minimum cash requirement. (Leave no cells blank - enter "0" wherever required).
2. Which of the following statement is true?
a) The income…
Chapter 9 Solutions
Managerial Accounting: Tools for Business Decision Making
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