Delbert, Inc. has prepared its third quarter budget and provided the following data:JulAugSepCash collections$49,000$39,500$46,000Cash payments:Purchases of direct materials30,00022,10017,600Operating expenses12.4008,50011,400Capital expenditures13,30024,2000The cash balance on June 30 is projected to be $5,300. The company has to maintain a minimum cash balanceof $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in incrementsof $5,000 and has to pay interest every month at an annual rate of 4%. All financing transactions are assumed to takeplace at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surpluscash. How much will the company have to borrow at the end of July?OA. $15,000OB. $10,000OC. $5,000OD. $0

The answer is in the explanation.Explanation:Option b. $10,000 Initial cash balance:Cash balance…

Answered: Delbert, Inc. has prepared its third…

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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Vargas Company is preparing a cash budget for April. The company has $27,000 cash at the beginning of April and anticipates $60,000 in cash receipts and $64,500 in cash disbursements during April. Vargas Company has an agreement with its bank to maintain a cash balance of at least $25,000. To maintain the $25,000 required balance, during April the company must: Borrow $2,500 from the owner. Borrow $5,000 from the owner. Borrow $7,500 from the owner. Borrow $4,500 from anyone other than the bank or the owner.
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. Cash Receipts Cash payments January $ 524,000 $ 465,300 February 412,500 353,800 March 475,000 526,000 Kayak requires a minimum cash balance of $40,000 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 $40,000 is used to repay loans at month-end. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1. Prepare monthly cash budgets for January, February, and March.
The following information is provided to assist in the preparation of the Cash Budget for Ding Ltd. for May 2020. The cash balance at 1 May 2020 is $30,000. Budgeted Sales ($) Budgeted Purchases ($) April 170,000 64,000 May 140,000 68,000 All sales are on cash basis and will be collected in the same month the sale is made. All purchases are made on credit and payments are made as follows: 60% of purchases are paid for in the month of purchase. 40% of purchases are paid for in the month following the purchase. The business plans to take out a small business loan of $50,000 at the end of May 2020 and will be repaying it back in July 2020. Selling and administrative expenses each month are $45,000. The selling and administrative expenses include monthly depreciation expense of $6,000. Sales commission is 15% of the total monthly sales, and paid to the staff at the end of every month. Equipment costing $35,000 is expected to be bought in May and paid in…
Miller Corporation has the following sales budget for the third quarter of 2021: Month Sales July $400,000 August $320,000 September $500,000 Historically, the following trend has been established regarding cash collection of sales: 60 percent of sales are paid in month of sale 35 percent of sales are paid in month following the sale 5 percent of sales are uncollectible and are written off in the month following the sale The expected total cash receipts for the month of September is: A. $300,000. B. $25,000. C. $112,000. D. $412,000.
The following information was taken from Trusted Care Company's cash budget for the month of April: Beginning cash balance Cash receipts Cash disbursements If the company has a policy of maintaining an end of the month minimum cash balance of $25,000, the amount the company would have to borrow is $10,000 $13,000 $11,000 $0 $27,000 62,000 75,000
The company provides the following information regarding the cash budget for next year: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Beginning cash balance $5,000 $5,000 $5,000 $5,000 Excess (Deficiency) ($3,000) $2,000 ($2,500) $1,000 The company's policy is to start each quarter with a cash balance of $5,000.The company has access to a line of credit in the amount of $50,000 for any short term borrowing needs and pays the loans off as quickly as possible.The company assumes the cash budget for the year will begins with no loans.What is the expected loan balance at the end of Quarter 2 (ignore interest)?
Verle, Inc. has a cash balance of $24,000 on April 1. The company is now preparing the cash budget for the second quarter. Budgeted cash collections and payments are as follows: Cash collections Cash payments: Purchases of direct materials Operating expenses Apr May Jun $24,000 $24,000 $25,000 5,800 4,600 4,600 6,000 3,500 5,300 There are no budgeted capital expenditures or financing transactions during the quarter. Based on the above data, calculate the projected cash balance at the end of May. OA. $60,200 OB. $24,000 OC. $52,100 OD. $55,600
Vaughn, Inc. prepared the following cash budget for the fourth quarter. Fill in the missing amounts, assuming that Vaughn desires to maintain a $15,000 minimum monthly cash balance and all equipment was purchased during December. Any required borrowings and repayments must be made in even increments of $1,000. (Enter answers in necessary fields only. Leave other fields blank. Do not enter 0.) Beginning cash balance Collections from sales Total cash available Less disbursements Materials purchases Direct labor Manufacturing overhead Selling & administrative expenses Equipment purchase Dividends Total disbursements Excess (deficiency) of cash Minimum cash balance Cash available (needed) Financing: Borrowings Repayments Interest Total financing Ending cash balance October 50,000 66,500 5,000 20,000 28,500 66,000 15.000 -14,500 $15.500 November $15.500 $ 93,500 10.000 6,000 24,000 25,000 28.500 15.000 -150 -15,150 $13,350 $ December 120,000 14,000 8,000 22,000 5,000 15,000 9,000 $ Quarter…
Laurey Inc. is working on its cash budget for June. The budgeted beginning cash balance is $45,100. Budgeted cash receipts total $129,000, and budgeted cash disbursements total $134,000. The desired ending cash balance is $60,000. To attain its desired ending cash balance for June, the company needs to borrow:
Stuart Medical Clinic has budgeted the following cash flows: January February March Cash receipts $ 115,000 $ 121,000 $ 141,000 Cash payments For inventory purchases 97,500 79,500 92,500 For S&A expenses 38,500 39,500 34,500 Stuart Medical had a cash balance of $15,500 on January 1. The company desires to maintain a cash cushion of $8,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 1 percent per month. Repayments may be made in any amount available. Stuart pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this year’s quarterly results. Required Prepare a cash budget.
Garden Depot is a retailer that provided the following budgeted cash flows for next year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total cash receipts $ 180,000 $330,000 $210,000 $230,000 Total cash disbursements $ 260,000 $230,000 $220,000 $240,000 The company's beginning cash balance for next year will be $20,000. The company requires a minimum cash balance of $10,000 and may borrow money at the beginning of any quarter and may repay any part of its loans at the end of any quarter. Interest payments, based on a quarterly interest rate of 3%, are due on any principal at the time it is repaid. For simplicity, assume interest is not compounded. Required: Prepare the company's cash budget for next year.
The accountant for Baird's Dress Shop prepared the following cash budget. Baird's desires to maintain a cash balance of $24,000 at the end of each month. Funds are assumed to be borrowed and repaid on the last day of each month. Interest is charged at the rate of 1 percent per month. Required a. Complete the cash budget by filling in the missing amounts. b. Determine the amount of net cash flows from operating activities Baird's will report on the third quarter pro forma statement of cash flows. c. Determine the amount of net cash flows from financing activities Baird's will report on the third quarter pro forma statement of cash flows. Complete this question by entering your answers in the tabs below. Req A Req B and C Complete the cash budget by filling in the missing amounts. Note: Any shortages or repayments should be indicated with a minus sign. Round your answers to the nearest whole dollar amount. Cash Budget July August September Section 1: Cash receipts Beginning cash balance…

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