Archer Electronics Company's actual sales and purchases for April and May are shown here along with forecast sales and purchasesfor June through September:April (actual)May (actual)June (forecast)July (forecast)August (forecast)September (forecast)Sales$ 370,000350,000325,000325,000340,000380,000Purchases$ 155,000145,000145,000205,000225,000220,000The company makes 20 percent of its sales for cash and 80 percent on credit. Of the credit sales, 50 percent are collected in themonth after the sale and 50 percent are collected two months later. Archer pays for 20 percent of its purchases in the month afterpurchase and 80 percent two months after.Labor expense equals 15 percent of the current month's sales. Overhead expense equals $12,500 per month. Interest payments of$32,500 are due in June and September. A cash dividend of $52,500 is scheduled to be paid in June. Tax payments of $25,500 aredue in June and September. There is a scheduled capital outlay of $350,000 in September.Archer Electronics' ending cash balance in May is $22,500. The minimum desired cash balance is $10,500. c. Prepare a complete monthly cash budget with borrowing and repayments for June through September. The maximum desired cashbalance is $50,500. Excess cash (above $50,500) is used to buy marketable securities. Marketable securities are sold beforeborrowing funds in case of a cash shortfall (less than $10,500).Note: Negative amounts should be indicated by a minus sign. Assume the June beginning loan balance and beginningmarketable security balance is $0. Leave no cells blank be certain to enter O wherever required.Total cash receiptsTotal cash paymentsNet cash flowBeginning cash balanceCumulative cash balanceBorrowRepay loanSell marketable securitiesBuy marketable securitiesEnding cash balanceCumulative loan balanceCumulative marketable securities$$$Archer ElectronicsCash BudgetJune0 $0 $0 $July0 $0 $0 $August0 $0 $0 $September00

The cash budget is a financial report prepared under budgeting that shows estimation of the cash…

Answered: c. Prepare a complete monthly cash…

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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Part #2: K Company is planning its cash disbursements for the upcoming months. In June, it anticipates $72,000 in Purchases, $130,000 in Payroll, and $40,000 in Loan Payments. In July, it anticipates $79,000 in Purchases, $140,000 in Payroll, and $35,000 in Loan Payments. In August, it anticipates $80,000 in Purchases, $150,000 in Payroll, and $30,000 in Loan Payments. Purchases are usually paid 40 percent in the current month and 60 percent in the following month. Payroll is paid 80 percent in the current month and 20 percent in the following month. Loan Payments are paid in the month due. Prepare a schedule of cash disbursements for the month of July only.
A loan has quarterly payments. The APR is 16%, and interest is compounded 12 time(s) per year. The effective interest rate that would be needed to find the payment amount for the loan is _%. Margin of error for correct responses: +/-.02 (%) Rounding and Formatting instructions: Do not enter dollar signs, percent signs, commas, X, or any words in your response. Do not round any intermediate work, but round your *final* response to 2 decimal places (example: if your answer is 12.3456, 12.3456%, or $12.3456, you should enter 12.35).
a. Beginning cash balance on June 1, P85,300. b. Cash receipts from sales, P519,500. Budgeted cash disbursements for purchases, P274,500. C. d. Budgeted cash disbursements for salaries, P96,300. e. Other budgeted cash expenses, P58,300. f. Cash repayment of bank loan, P33,300. g. Budgeted depreciation expense, P35,300. Use the above information to determine the ending cash balance to be reported on the month ended June 30 cash budget.
Cheyenne Company has budgeted the following information for June: Cash receipts Beginning cash balance Cash payments Desired ending cash balance If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments, and interest is paid monthly at 1% on the first day of the following month. The company had no debt before June 1. The amount of interest paid on July 1 would be: Multiple Choice $590. $ 339,000 22,000 382,000 42,000 $476.
The following information was taken from Bonita Industries's cash budget for the month of July: Beginning cash balance $440000 Cash receipts 404000 Cash disbursements 558000 If the company's policy is to maintain a minimum end of the month cash balance of $430000, the amount the company would have to borrow in July is $286000. $144000. $10000. $26000.
Kat Ltd.'s September balance sheet contains the following information: Cash Accounts receivable. Allowance for doubtful accounts Merchandise inventory $ 37,500 (dr) 126,000 (dr) 2,800 (cr) 26,250 (dr) Management has designated $37,500 as the firm's minimum monthly cash balance. Other information about the firm and its operations is as follows: a. Sales revenues of $350,000, $420,000, and $312,500 are expected for October, November, and December, respectively. All goods are sold on account. b. The collection pattern for accounts receivable is 60% in the month of sale, 39% in the month following the month of sale, and 1% uncollectible, which is set up as an allowance. c. Cost of goods sold is 60% of sales revenues. d. Management's target ending balance of merchandise inventory is 10% of the current month's budgeted cost of goods sold. e. All accounts payable for inventory are paid in the month of purchase. f. Other monthly expenses are $49,250, which includes $3,500 of depreciation and…
Holiday Tree Farm has a cash balance of $34 and a short-term loan balance of $180 at the beginning of Qt. The net cash inflow for the first quarter is $36 and for the second quarter there is a net cash outflow of $48. All cash shortfalls are funded with short-term debt. The firm pays 2 percent of its prior quarter's ending loan balance as interest each quarter. The minimum cash balance is $20. What is the short-term loan balance at the end of Q2? Multiple Choice $184.3 $179.2 $138.6 $128.4 $1931
Carefully study the following cash budget and determine the amount to be borrowed or repaid during each quarter, so that the company never ends a quarter with less than $50,000 cash on hand, and always repays as much debt as possible. There is no debt as of the beginning of the first quarter, and interest costs are assumed not significant in this analysis. Use the pick lists associated with the boxed areas near the bottom of the spreadsheet to determine the right amounts to borrow and repay each quarter. Correct choices will result in the boxed areas turning green. Cash budget Beginning cash Customer receipts Available cash Less: disbursements Direct materials Direct labor Factory overhead SG&A Other expense and tax Equipment purchases Total disbursements Cash surplus (deficit) Financing: Planned borrowing Planned repayment Ending cash balance First Quarter 10,000 150,000 140,000 28,000 13,500 14,000 11,000 0 31,000 97,500 0 52,500 52,500 0 Second Quarter 52,500 160,000 212,500 30,000…
A company has the following excess (deficiency) of cash receipts over cash disbursements projected for the next year on a quarterly basis. It will not have any cash at the start of the year. The quarterly interest rte is 2%, and any borrowing and repayment of principal must be in round $1,000 amounts. There is no cash reserve requirement Assume loan related payments are made when excess cash is available. Quarter 1 2 3 4 Year Excess (deficiency) of cash available for disbursements ($121,140) ($41,680) $177,680 $2,160 $17,020 Required: Prepare a cash budge by quarter for the year. What is the ending cash balance in the fourth quarter if interest is accrued until the end of the fourth quarter and paid at that time along with the total principal borrowed? Please provide detail calculations of how you got the cash available at the beginning. Thank you.
AMRO Financials is quite certain that interest rates are going to decrease next month. How should the bank manager adjust the bank’s one-month repricing gap to increase the net interest income when interest rates decrease The bank should set its repricing gap to a positive position. In this case, as rates decrease, interest income will decrease by less than the decrease in interest expense. The bank should set its repricing gap to a negative position. In this case, as rates decrease, interest expense will decrease by more than the decrease in interest income. The bank should set its repricing gap to a positive position. In this case, as rates decrease, market value of assets will increase by more than the increase in market value of liabilities. The bank should set its repricing gap to a negative position. In this case, as rates decrease, market value of assets will increase by more than the increase in market value of liabilities.
Suppose that a bank does the following: a. Sets a loan rate on a prospective loan with BR = 4.23% and ϕ = 3.16%. b. Charges a 0.33 percent loan origination fee to the borrower. c. Imposes a 9 percent compensating balance requirement to be held as noninterest-bearing demand deposits. d. Holds reserve requirements of 8 percent imposed by the Federal Reserve on the bank’s demand deposits. Calculate the bank’s ROA on this loan.

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