Cash budget The monthly cash budgets for the second quarter of 2013 follow($000 omitted) for Morrison Mfg. Co. A minimum cash balance of $30,000 isrequired to start each month, and a $100,000 line of credit has been arranged with a local bank at a 8% interest rate. Cash balance, beginning . . . . . . . . . . . . . . . . . . $ 26 $ ? $ ? $ 26Add collections from customers . . . . . . . . . . . . . ? 108 ? ?Total cash available . . . . . . . . . . . . . . . . . . . $ 94 $ ? $166 $338Less disbursements:Purchase of inventory . . . . . . . . . . . . . . . . . . . $ ? $ 60 $ 48 $ ?Operating expenses . . . . . . . . . . . . . . . . . . . . 30 ? ? ?Capital additions . . . . . . . . . . . . . . . . . . . . . . . 34 8 ? 44Payment of dividends . . . . . . . . . . . . . . . . . . . – – ? 8Total disbursements . . . . . . . . . . . . . . . . . . $ ? $108 $ 82 $304Excess (defi ciency) of cash availableover disbursements. . . . . . . . . . . . . . . . . . . . $(20) $ ? $ 84 $ ?Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? – – ?Repayments (including interest) . . . . . . . . . . . . – – ? ?Cash balance, ending . . . . . . . . . . . . . . . . . . . . $ ? $ 30 $ ? $ 33Required:Calculate the missing amounts. (Hint: The total cash available includes collections from customers for all three months, plus the beginning cash balance from April 1,2013.)
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
($000 omitted) for Morrison Mfg. Co. A minimum cash balance of $30,000 is
required to start each month, and a $100,000 line of credit has been arranged with a local bank at a 8% interest rate. Cash balance, beginning . . . . . . . . . . . . . . . . . . $ 26 $ ? $ ? $ 26
Add collections from customers . . . . . . . . . . . . . ? 108 ? ?
Total cash available . . . . . . . . . . . . . . . . . . . $ 94 $ ? $166 $338
Less disbursements:
Purchase of inventory . . . . . . . . . . . . . . . . . . . $ ? $ 60 $ 48 $ ?
Operating expenses . . . . . . . . . . . . . . . . . . . . 30 ? ? ?
Capital additions . . . . . . . . . . . . . . . . . . . . . . . 34 8 ? 44
Payment of dividends . . . . . . . . . . . . . . . . . . . – – ? 8
Total disbursements . . . . . . . . . . . . . . . . . . $ ? $108 $ 82 $304
Excess (defi ciency) of cash available
over disbursements. . . . . . . . . . . . . . . . . . . . $(20) $ ? $ 84 $ ?
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? – – ?
Repayments (including interest) . . . . . . . . . . . . – – ? ?
Cash balance, ending . . . . . . . . . . . . . . . . . . . . $ ? $ 30 $ ? $ 33
Required:
Calculate the missing amounts. (Hint: The total cash available includes collections from customers for all three months, plus the beginning cash balance from April 1,
2013.)
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