Assume Nordstrom prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for one of its stores (in thousands).NORDSTROMBalance SheetMarch 31Liabilities and Stockholders' Equity$2,525 Merchandise purchases payable $2,400Dividends payable 710Stockholders' equity 8,005AssetsCashAccounts receivableInventory2,0403,400Prepaid Insurance150Fixtures3,000Total assets$11,115Total liabilities and equity $11,115Actual and forecasted sales for selected months in the upcoming year are as follows:Month (in thousands) Sales RevenueJanuaryFebruaryMarchAprilMayJuneJulyAugust$2,6002,7003,0003,6003,8003,5003,2004,000Monthly operating expenses are as follows:Wages and salaries $750DepreciationAdvertisingOther costs7555350Cash dividends for the store of $710 thousand are declared during the third month of each quarter and arepaid during the first month of the following quarter. Operating expenses, except insurance, rent, anddepreciation are paid as incurred. The prepaid insurance is for five more months. Cost of goods sold is equalto 60% of sales. Ending inventories are sufficient for 150% of the next month's cost of sales. Purchases duringany given month are paid in full during the following month. Cash sales account for 50% of the revenue. Of thecredit sales, 60% are collected in the next month and 40% are collected in the month after. Money can beborrowed and repaid in multiples of $100 thousand at an interest rate of 12% per year. The company desires aminimum cash balance of $2 million on the first of each month. At the time the principal is repaid, interest ispaid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and allrepayment is at the end of the month. Money is never repaid at the end of the month it is borrowed.(c) Prepare a cash disbursements schedule for each month of the second quarter ending June 30. Do not include repayments of borrowings.NORDSTROMSSchedule of Monthly Cash Disbursements (in thousands)Quarter Ending June 30Total cash disbursementsAprilMay0x $June0x $ 0x $Total0x(d) Prepare a cash budget for each month of the second quarter ending June 30. Include budgeted borrowings and repaymentsOnly use negative signs, if needed, for: excess receipts over disbursements, balance before borrowings and cash balances (beginning and ending).NORDSTROMSMonthly Cash Budget (in thousands)Quarter Ending June 30AprilMayJuneTotalCash balance, beginning$0x $0x $0x0xReceipts0x0x0x0xDisbursements0x0x0x0xExcess receipts over disb.0x0x0 x0 xBalance before borrowings0x0x0x0 xBorrowings0x0 ✓0✓0xLoan repayments0 ✓0x0x0xCash balance, ending$0x$0x $0x $0x

Budgeting is the process of undertaking plans to spend money. This plan enables the business to…

Answered: (c) Prepare a cash disbursements…

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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Sonoma Housewares Inc. Cash Budget For the Three Months Ending July 31 May June July Estimated cash receipts from: Cash sales $ $ Collection of accounts receivable Total cash receipts $ Estimated cash payments for: Manufacturing costs Selling and administrative expenses Capital expenditures Other purposes: Income tax Dividends Total cash payments Cash increase or (decrease) $ bala at beginning Cash balance at end of month Minimum cash balance Excess (deficiency) $
c. Prepare a monthly cash budget with borrowings and repayments for January, February, and March. Note: Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0. Leave no cells blank be certain to enter O wherever required. Total cash receipts Total cash payments Net cash flow Beginning cash balance Cumulative cash balance Monthly loan (or repayment) Ending cash balance Cumulative loan balance Jayden's Carryout Stores. Cash Budget January 0 0 0 February 0 0 0 March 0 0
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Carmen Company sells jar candles. The sales forecast (units) for the coming months is: April 210 May 140 June 150 July 200 August 160 Each candle costs $ 10. The ending inventory policy is 40% of next month's sales needs. April 1 inventory will be as expected under the policy. Carmen pays for purchases 30% in the month of purchase and 70% the following month. Accounts payable on April 1 is $2,460. Required: a. Prepare a purchases budget for the quarter ending June 30. Note: Deductible values must be indicated with a minus sign.a. Prepare a purchases budget for the quarter ending June 30. Note: Deductible values must be indicated with a minus sign. b. Prepare a cash payments budget for the quarter ending June 30.
Cash Receipts Budget and Accounts Receivable Aging Schedule Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,760,000 Quarter 2 5,620,000 Quarter 3 3,060,000 Quarter 4 7,720,000 In Shalimar's experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,310,000 and for the fourth quarter of the current year are $7,350,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year 4, current year 1, next year 2, next year 3. next vear 4, next year 2. Construct a cash receipts budget for…
Required: Prepare Shadee's budgeted income statement for the months of May and June. Note: Do not round your intermediate calculations. Round your answers to 2 decimal places. Budgeted Gross Margin SHADEE CORPORATION Budgeted Income Statement Budgeted Net Operating Income May June
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 $ 521,000 408,000 457,000 $ 467,800 354,800 522,000 Kayak requires a minimum cash balance of $50,000 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 $50,000 is used to repay loans at month-end. The company has a cash balance of $50,000 and a loan balance of $100,000 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.)
A-2
1. Calculate the expected cash collections for July. 2. Calculate the expected cash disbursements for merchandise purchases for July. 3. Prepare a cash budget for July.
3. The Uthred Company, a merchandising firm, has planned the following sales for the next four months: March $50,000 Аpril $70,000 Мay $90,000 June July $90,000 Total budgeted Sales $60,000 Sales are made 60% on account and 40% cash. From experience, the company has learned that a month's sales on account are collected according to the following pattern: Month of sale 60% • First month following month of sale . • Second month following month of sale • Uncollectible 28% 10% 2% Uthred has a building that is not used in the business operation; they rented it out and receive $10,080 rent every month. The company requires a minimum cash balance of $14,000 to start a month.
Tomo, Inc. has prepared its third quarter budget and provided the following data: Jul $49,000 Aug $39,800 Sep $47,900 Cash collections Cash payments: Purchases of direct materials Operating expenses Capital expenditures 17,900 11,100 0 The cash balance on June 30 is projected to be $4,600. The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $5,000 and has to pay interest every month at an annual rate of 5%. All financing transactions are assumed to take place at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surplus cash. Calculate the final projected cash balance at the end of August taking into consideration all the financing transactions. 31,000 12,100 13,700 O A. $46600 OB. $-8842 OC. $15000 O D. $6158 21,800 8,700 24,900

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