Answered: ($000) Cash Accounts Receivable…

($000) Cash Accounts Receivable Inventory Accounts Payable 1 $100 200 200 100 2 $100 100 500 100 Quarter 3 $100 100 900 100 4 $100 600 50 100

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

Cash Book

So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial transactions in the firm. Cash is something that is universally accepted as a mode of payment. So, now comes to the topic i.e., cash book.

Question

If you chose to use only long-term financing, what total amount of borrowing would you need to have on a permanent basis? Forecast your excess cash levels under this scenario (see MyFinanceLab for the data in Excel format).

($000)
Cash
Accounts Receivable
Inventory
Accounts Payable
A
1
$100
200
200
100
2
$100
100
500
100
Quarter
3
$100
100
900
100
4
$100
600
50
100

Leveraging special tenchniques in analyzing historical data to predict future trends. Forecasting covers the methods and types of forecasting and their application to case studies.

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Step 1: net working capital concept explanation

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Step 2: Calculation of amount of borrowing for permanent basis and forecasting of excess cash

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Accounting for Cash and cash equivalents

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