Describe your findings and indicates the maximum amount of bank borrowing that is needed from the following statements. Cash BudgetOctoberNovemberDecemberSales$ 1,000,000.00 $ 1,500,000.00 $3,000,000.00Cash Collected on Sales$ 1,000,000.00 $1,500,000.00Cash Payment for PurchaseOther Expense$ 800,000.00 $ 1,200,000.00 $ 2,400,000.0070,000.00 $ 105,000.00 $10,000.00 $210,000.00Depreciation amount$10,000.00 $10,000.00Interest Expense$12,000.00 $ 12,000.00 $12,000.00Income Before Tax$$ 108,000.00 $ 173,000.00$368,000.00Тах Paid$Net Income$$ 108,000.00 $ 173,000.00 $368,000.00Cash Budget and Pro Forma of Cash Flow StatementOctoberNovemberDecember$ 1,000,000.00 $ 1,500,000.00 $ 3,000,000.00700,000.00 $ 1,000,000.00 $800,000.00 $ 1,200,000.00 $70,000.00 $ 105,000.00 $Sales1,500,000.002,400,000.00Cash Collected on SalesCash Payment for PurchaseOther Expenses Paid|Таax PaidSurplus210,000.00$ (170,000.00) $ (305,000.00) $ (1,110,000.00)50,000.00 $ (120,000.00) $(425,000.00)$ (120,000.00) $ (425,000.00) $ (1,535,000.00)Cash Flows from Operating Activities $ (170,000.00) $ (305,000.00)$ (1,110,000.00)Opening BalanceClosing Balance

Cash budget is defined as cash inflows as well as outflows estimation of the company over the…

Answered: Describe your findings and indicates…

Business

Accounting

Describe your findings and indicates the maximum amount of bank borrowing that is needed from the following statements.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: explain the optimal size of a bank’s liquidity buffer

A: Liquidity buffer is defined as the stock of liquid assets, where the banking companies used to…

Q: Borrowing of reserve fund by Bank means a. To meet the customers need for business loans b.…

A: A reserve fund is a special account with a financial institution such as a bank

Q: What is the first step in calculating the lender's effective yield and calculating the borrower's…

A: Amortization schedule refers to the statement showing the details of the loan amount, interest…

Q: What are the possible financial objectives can be recommended to a bank?

A: Financial objectives of bank are basis of working of bank.

Q: profit margin ratios of bank proftability? please use in-text referencing

A: Gross profit margin may be a live of profit that shows the proportion of revenue that exceeds the…

Q: Explain when EXACTLY you would prefer the previous balance method to the average daily balance…

A: Previous balance sheet method is a way wherein amount of interest is charged on the previous month…

Q: Explain the possible IFRS treatment of bank loans.

A: IFRS is international finance reporting standards will replace with Accounting standards 39.

Q: Bank Intermediation Ratio also used to assess its liquidity* Capital to Loans Ratio Deposits to…

A: Liquidity in banking is the ability of a bank to meet short-term business and financial obligations…

Q: The ANZ Bank is an example of a:

A: A bank is an institution that provides different banking services and facilities like accepting…

Q: Assess the bank in terms of profitability, liquidity, and capital adequacy. Use appropriate ratios…

A: Banking Financial Ratios Ratios that are particular to the banking sector include net interest…

Q: Explain how will you analyze Financial Statements of a Bank.

A: Bank financial statement Although banks' financial statements generally follow a similar format to…

Q: Explain the difference between how you would characterize bank deposits and loans as assets and…

A: Balance sheet: This financial statement reports a company’s resources (assets) and claims of…

Q: Liabilities of saving institutions include: checkable deposits, NOW accounts, and regular savings…

A: The answer for the multiple choice question and relevant explanation are presented hereunder : What…

Q: w do yo

A: Introduction : A credit history can be understood as a history of a debtor's timely debt repayments.…

Q: Discuss in detail about the Loan securitization as a tool for managing risks by banks. Discuss about…

A: Securitization : It is a risk management tool used to reduce an risk that is particular to some…

Q: What is credit history? A record of a person's borrowing and repayment activity used to calculate…

A: Credit history checks if the borrower has been responsible with the debt payments or not. It checks…

Q: A bank's net interest margin represents the proportion of its investments that are financed with…

A: The difference between interest paid and interest received, adjusted for the entire amount of…

Q: Explain the differen

A: Banks are the financial institutions of a county that provides loans, accept deposit from the public…

Q: (a) Explain the main elements involved in the structuring of a credit facility. (b) Explain the…

A: A credit facility is a method of pooling debt obligations and then redistributing the associated…

Q: What are the risk-adjusted on-balance-sheet assets of the bank as defined under the Basle Accord?

A: The answer is stated below:

Q: Which of the following is money kept by the firm with a bank in low-interest or non-interest bearing…

A: Loan is a part of financing in which a bank or institution lends money to the business in exchange…

Q: what is the basics of banking and discuss the various type of deposits

A: A bank is a sort of financial entity that may accept deposits and lend money. Banks may provide…

Q: Critically discuss the effect of deposit insurance on bank stability.

A: The deposit insurance is an insurance product that is offered to reduce or eliminate the risk of…

Q: Identify two important pieces of information that should be included in the borrower's credit…

A: Credit is a two-party transaction in which one (the creditor or lender) exchanges money,…

Q: I have questions about whether purchased funds are recorded as an asset or liability on a bank's…

A: Whether purchased funds are recorded as an asset or liability on a bank's balance sheet depends on…

Q: When a lender looks at your FICO credit score to decide whether to lend to you, which of the "Five…

A: When a lender looks at your FICO credit score to decide whether to lend to you, he is considering…

Q: Which are liabilities to a bank? Select one: O a. Vault cash and demand deposits O b. Demand and…

A: Liability is something a company owes to someone else. It is usually a monetary value.

Q: A bank's required reserve ratio is equal to: Checkable Deposits/Required Reserves Net Worth/Assets…

A: In the context of the given question, we are required to explain the required reserve ratio which is…

Q: Risk-weighted assets increase Risk-weighted assets decrease

A: Step 1 Risk assets are calculated by adding the amount of risk to the appropriate risk weight of the…

Q: xplain about, B

A: Introduction : A bank can be understood as the type of financial organization that receives public…

Q: When using profitability, liquidity and capital adequacy to assess a bank annual report what does it…

A: Whenever stakeholders need to measure the financial position or the credibility of any company, they…

Q: Given a financial institution that make money in three ways: interest income, interest income, and…

A: Banks and Financial institutions make most of their money from loaning and re-loaning money. Low…

Q: When a lender looks at your FICO credit score to decide whether to lend to you, which of the “Five…

A: The five Cs of credit is a system used by lenders to get the creditworthiness of borrower

Q: risk

A: Introduction: Banks & other financial institution play an important role in the economic…

Q: Njenge Bank has the following balance sheet (in millions). Liabilities and Equity. Deposits…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: rately explain a

A: Introduction : In simple words, banks refers to a financial institution which provides funds to the…

Q: Create a plan of investment on a bank and solve its interest with respect to the rate offered and…

A: Simple interest is computed on the loan's initial main amount, but compound interest is calculated…

Q: What is a common method used by banks to account for the interest income on loans that

A: The most common method used by banks to account for the interest income on loans that considers…

Q: what are the determinants of bank profitability ratios? please use in-text referencing

A: Bank Profitability Bank Profitability: Like all businesses, banks profit by earning extra money…

Q: Direct finance occurs when A. savers go directly to borrowers for funds. B. borrowers deposit funds…

A: Financing is the borrowing of money by the needy. if someone needs to money for some purpose and…

Q: Explain and answer the following questions below: 1. Explain the financial presentation and…

A: Cash refers to the currency and coins which is most liquid asset of the company which could possess.…

Concept explainers

Cash budget

A cash budget is an estimate of an organization's cash flow for the future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future. If cash receipts are insufficient to cover future expenses, an organization may plan to obtain funds from other sources. After estimating the sales, purchase, and capital expenditure budgets for the year, management develops a cash budget. These budgets are created to ensure that an organization's cash flow is managed. It is important to note that only cash transactions are recorded when actual cash enters and exits an organization.

Question

Describe your findings and indicates the maximum amount of bank borrowing that is needed from the following statements.

Cash Budget
October
November
December
Sales
$ 1,000,000.00 $ 1,500,000.00 $
3,000,000.00
Cash Collected on Sales
$ 1,000,000.00 $
1,500,000.00
Cash Payment for Purchase
Other Expense
$ 800,000.00 $ 1,200,000.00 $ 2,400,000.00
70,000.00 $ 105,000.00 $
10,000.00 $
210,000.00
Depreciation amount
$
10,000.00 $
10,000.00
Interest Expense
$
12,000.00 $ 12,000.00 $
12,000.00
Income Before Tax
$
$ 108,000.00 $ 173,000.00$
368,000.00
Тах Paid
$
Net Income
$
$ 108,000.00 $ 173,000.00 $
368,000.00
Cash Budget and Pro Forma of Cash Flow Statement
October
November
December
$ 1,000,000.00 $ 1,500,000.00 $ 3,000,000.00
700,000.00 $ 1,000,000.00 $
800,000.00 $ 1,200,000.00 $
70,000.00 $ 105,000.00 $
Sales
1,500,000.00
2,400,000.00
Cash Collected on Sales
Cash Payment for Purchase
Other Expenses Paid
|Таax Paid
Surplus
210,000.00
$ (170,000.00) $ (305,000.00) $ (1,110,000.00)
50,000.00 $ (120,000.00) $
(425,000.00)
$ (120,000.00) $ (425,000.00) $ (1,535,000.00)
Cash Flows from Operating Activities $ (170,000.00) $ (305,000.00)$ (1,110,000.00)
Opening Balance
Closing Balance

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

: Provide example of accounting treatment for transactions related to loan in two situations as following Personal loan Personal guarantees The accounting treatment include the payment of the loan and return the loan to the bank , interest rate , commission
Describe the nature of banking. What are the functions of banks? Give an example of an existing bank product or service under each function.
The complete set of financial statements of an Islamic Bank should include A)Statement of cash flows B)Statement of changes in unrestricted investment C)Statement of sources and uses of deposit funds D)All of the above
i need an essay for bank sector in expenditure cycle
Describe about the bank loans.
How could the cash budget be used when negotiating the terms ofa bank loan?
The term ‘loanable funds' refers to: a. only those funds loaned by one bank to another bank. b. only those funds loaned to banks by the public. c. only those funds loaned to banks by the central bank. d. all those funds changing hands between the lenders and borrowers in the financial markets.
Examine the role of bank credit in financing of working capital. What are the types of bank credit?
Describe how a bank might use standards.
List the ways in whichbanks deal with creditrisk
Can you tell me about the link that exists between money, credit, and financial institutions?
How can we check the balance sheet to determine the extent to which borrowed funds have been used to finance assets?