Expected cash collections:March cash collectionsMarch collections on account:January salesFebruary salesMarch salesTotal cash collectionsPayments to suppliers:Accounts payable for inventory purchases, beginning balanceMarch purchasesTotal cash payments 5573 Cash balance, March 19 Add cash receipts:D Collections from customersTotal cash available23Less disbursements:Payments to suppliersSelling and administrative expenses5 Equipment purchases5 Dividends paidTotal disbursements3 Preliminary cash balanceFinancing:D Additional loan123 Total financing4 Cash balance, March 31Loan repaymentsInterestS&P EnterprisesCash BudgetFor the Month of March

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Cash balance, March 1 Add cash receipts: Collections from customers Total cash available Less disbursements: Payments to suppliers Selling and administrative expenses Equipment purchases Dividends paid Total disbursements Preliminary cash balance Financing: Additional loan Loan repayments Interest Total financing Cash balance, March 31 S&P Enterprises Cash Budget For the Month of March

Cash balance, March 1 Add cash receipts: Collections from customers Total cash available Less disbursements: Payments to suppliers Selling and administrative expenses Equipment purchases Dividends paid Total disbursements Preliminary cash balance Financing: Additional loan Loan repayments Interest Total financing Cash balance, March 31 S&P Enterprises Cash Budget For the Month of March

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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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

Expected cash collections:
March cash collections
March collections on account:
January sales
February sales
March sales
Total cash collections
Payments to suppliers:
Accounts payable for inventory purchases, beginning balance
March purchases
Total cash payments

5
5
7
3 Cash balance, March 1
9 Add cash receipts:
D Collections from customers
Total cash available
2
3
Less disbursements:
Payments to suppliers
Selling and administrative expenses
5 Equipment purchases
5 Dividends paid
Total disbursements
3 Preliminary cash balance
Financing:
D Additional loan
1
2
3 Total financing
4 Cash balance, March 31
Loan repayments
Interest
S&P Enterprises
Cash Budget
For the Month of March

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Step 1: Understanding of Cash Budget

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Step 3: Payments to suppliers for March

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Step 4: Preparation of Cash Budget for the month of March

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Please read the direcitons on the first picture and answer the problems on the second picture. Thanks for your time.
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