ll touch( 11:05 AM© 64%Expert Q&ADoneMartin's Inc. is preparing its cash budget and its planner has forecasted sales revenues and purchases asshown in the below table, also it has the following information regarding its budgeting:1- The firm collects 40% for cash in the same month and 60% one month after the sale.2- The company pays 50% of its purchases in the same month and the remaining in the following month.3- Wages, are expected to be $60,000 per month4- Taxes are expected to be $20,000 per month.5- A major capital expenditure (Or Capital Outlays) of $100,000 is expected in February.6- Beginning cash balance on January will be $30,000 and the Minimum Cash Balance is $20,000.Month (in 2019)Sales (in $)Purchases (in $)December266,667120,000January200,000210,000February350,000270,000March450,000210,000April350,000150,0008- To determine the firm's Ending Cash Balance of each month, wecalculate:*O Total Collections - Total DisbursementsO Unadjusted Cash Balance +Current BorrowingO Beginning Cash Balance +Current BorrowingO Unadjusted Cash Balance - Current BorrowingO None of the above

The cash budget is prepared to estimate the cash balances.

8- To determine the firm's Ending Cash Balance of each month, we calculate:* Total Collections - Total Disbursements Unadjusted Cash Balance +Current Borrowing Beginning Cash Balance +Current Borrowing Unadjusted Cash Balance - Current Borrowing O None of the above

8- To determine the firm's Ending Cash Balance of each month, we calculate:* Total Collections - Total Disbursements Unadjusted Cash Balance +Current Borrowing Beginning Cash Balance +Current Borrowing Unadjusted Cash Balance - Current Borrowing O None of the above

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Martin's Inc. is preparing its cash budget and its planner has forecasted sales revenues and purchases as
shown in the below table, also it has the following information regarding its budgeting:
1- The firm collects 40% for cash in the same month and 60% one month after the sale.
2- The company pays 50% of its purchases in the same month and the remaining in the following month.
3- Wages, are expected to be $60,000 per month
4- Taxes are expected to be $20,000 per month.
5- A major capital expenditure (Or Capital Outlays) of $100,000 is expected in February.
6- Beginning cash balance on January will be $30,000 and the Minimum Cash Balance is $20,000.
Month (in 2019)
Sales (in $)
Purchases (in $)
December
266,667
120,000
January
200,000
210,000
February
350,000
270,000
March
450,000
210,000
April
350,000
150,000
8- To determine the firm's Ending Cash Balance of each month, we
calculate:*
O Total Collections - Total Disbursements
O Unadjusted Cash Balance +Current Borrowing
O Beginning Cash Balance +Current Borrowing
O Unadjusted Cash Balance - Current Borrowing
O None of the above

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