Agarwal, Incorporated, has a 50-day average collection period and wants to maintain a minimum cash balance of $35 million, which iswhat the company currently has on hand. The company currently has a receivables balance of $192 million and has developed thefollowing sales and cash disbursement budgets (in millions):SalesQ1$ 405Q2$ 477Q3$ 558Total cash disbursement279415652Q4$ 522434edComplete the following cash budget for the company.Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers inmillions rounded to the nearest whole million dollar amount, e.g., 32.AGARWAL, INCORPORATEDCash Budget(in millions)Q1Q2Q3Q4Beginning receivables192225 $265$310SalesCash collections405477558522372437513542Ending receivablesEA$225265$310$290Total cash collections$372437$513$542Total cash disbursements279415652434Net cash inflow$93$22$139 × $108Beginning cash balance35$128GA$150$11Net cash inflow9322139 ×108Ending cash balance$35 ×35 × $35 × $35 ×Minimum cash balanceᏌᏊ$35 × $35 × $35 × $35Cumulative surplus (deficit)$93115$24 × $84

The average collection period is the amount of time it takes for a business to receive payments owed…

Answered: Agarwal, Incorporated, has a 50-day…

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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Hurzdan, Inc., has a 50-day average collection period and wants to maintain a minimum cash balance of $35 million, which is what the company currently has on hand. The company currently has a receivables balance of $189 million and has developed the following sales and cash disbursement budgets (in millions): Q2 Sales $450 Total cash disbursement 268 390 Beginning receivables Sales Cash collections Ending receivables Total cash collections Total cash disbursements Net cash inflow Beginning cash balance Net cash inflow Ending cash balance Minimum cash balance Cumulative surplus (deficit) Q1 $378 Complete the following cash budget for the company. (A negative answer should be Indicated by a minus sign. Do not round Intermediate calculations and enter your answers in millions rounded to the nearest whole million dollar amount, e.g., 32.) + Q3 Q4 $531 $495 412 617 Q1 HURZDAN, INC. Cash Budget (in millions) 378 268 Q2 450 390 Q3 531 617 Q4 495 412
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