c. Prepare a complete monthly cash budget with borrowing and repayments for June through September. The maximum desired cash balance is $50,500. Excess cash (above $50,500) is used to buy marketable securities. Marketable securities are sold before borrowing 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 beginning marketable security 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 Borrow Repay loan Sell marketable securities $ $ Archer Electronics Cash Budget June 0 $ 0 $ July 0 $ 0 $ August 0 $ 0 $ LA September 0 0
c. Prepare a complete monthly cash budget with borrowing and repayments for June through September. The maximum desired cash balance is $50,500. Excess cash (above $50,500) is used to buy marketable securities. Marketable securities are sold before borrowing 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 beginning marketable security 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 Borrow Repay loan Sell marketable securities $ $ Archer Electronics Cash Budget June 0 $ 0 $ July 0 $ 0 $ August 0 $ 0 $ LA September 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Transcribed Image Text:Archer Electronics Company's actual sales and purchases for April and May are shown here along with forecast sales and purchases
for June through September:
April (actual)
May (actual)
June (forecast)
July (forecast)
August (forecast)
September (forecast)
Sales
$ 370,000
350,000
325,000
325,000
340,000
380,000
Purchases
$ 155,000
145,000
145,000
205,000
225,000
220,000
The company makes 20 percent of its sales for cash and 80 percent on credit. Of the credit sales, 50 percent are collected in the
month after the sale and 50 percent are collected two months later. Archer pays for 20 percent of its purchases in the month after
purchase 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 are
due 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.
Transcribed Image Text:c. Prepare a complete monthly cash budget with borrowing and repayments for June through September. The maximum desired cash
balance is $50,500. Excess cash (above $50,500) is used to buy marketable securities. Marketable securities are sold before
borrowing 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 beginning
marketable security 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
Borrow
Repay loan
Sell marketable securities
Buy marketable securities
Ending cash balance
Cumulative loan balance
Cumulative marketable securities
$
$
$
Archer Electronics
Cash Budget
June
0 $
0 $
0 $
July
0 $
0 $
0 $
August
0 $
0 $
0 $
September
0
0
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