Garden Depot is a retailer that provided the following budgeted cash flows for next year:1st Quarter 2nd Quarter3rd Quarter 4th Quarter$ 430,000$ 330,000$ 300,000$ 310,000$ 290,000$ 330,000$ 310,000$ 280,000Total cash receiptsTotal cash disbursementsThe company's beginning cash balance for next year will be $40,000. The companyrequires a minimum cash balance of $10,000 and may borrow money at the beginning ofany quarter and may repay any part of its loans at the end of any quarter. Interestpayments, based on a quarterly interest rate of 3%, are due on any principal at the time itis repaid. For simplicity, assume interest is not compounded.Required:Prepare the company's cash budget for next year.Note: Repayments, interest, and cash deficiencies should be indicated by a minus sign.Garden DepotBeginning cash balanceTotal cash receiptsTotal cash availableTotal nach disbursementsCash Budget1st Quarter2nd Quarter3rd Quarter4th QuarterYearProv7 of 7Novt

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Answered: Garden Depot is a retailer that…

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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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)?
Karim Corporation requires a minimum $8,300 cash balance. Loans taken to meet this requirement cost 2% interest per month (paid at the end of each month). Any preliminary cash balance above $8,300 is used to repay loans at month-end. The cash balance on July 1 is $8,700, and the company has no outstanding loans. Budgeted cash receipts (other than for loans received) and budgeted cash payments (other than for loan or interest payments) follow. Cash receipts Cash payments Beginning cash balance Add: Cash receipts Total cash available Less: Cash payments for Interest on loan July $ 24,300 28,450 Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) Total cash payments Preliminary cash balance Loan activity Additional loan (loan repayment) Ending cash balance August $ 32,300 30,300 Loan balance - Beginning of month Additional loan (loan…
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…
Karim Corporation requires a minimum $8,100 cash balance. Loans taken to meet this requirement cost 2% interest per month (paid at the end of each month). Any preliminary cash balance above $8,100 is used to repay loans at month-end. The cash balance on July 1 is $8,500, and the company has no outstanding loans. Budgeted cash receipts (other than for loans received) and budgeted cash payments (other than for loan or interest payments) follow. Cash receipts Cash payments Beginning cash balance Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) Total cash available July August $ 24,100 $ 32,100 28,150 30,100 Total cash payments Preliminary cash balance Loan activity Ending cash balance September $ 40,100 32,100 KARIM CORPORATION Cash Budget $ July Loan balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance…
The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: Sales/Costs Sales Manufacturing costs Selling and admin. expenses Capital expenses April May June $150,000 $175,000 $195,000 66,000 87,000 115,000 40,000 46,000 51,000 0 0 120,000 The company expects to sell about 15% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent $12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in December, and the annual property taxes are paid in September. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of April 1 include cash of $42,000, marketable…
The controller of Optimum wishes to improve the company's control system by preparing a monthly cash budget. The following information relates to the month ending July 31, 2021: June 30, 2021, cash balance Dividends were declared on June 15* $130,000 44, 000 83,600 13,000 198,000 122,400 47,000 70, 000 Cash expenditures to be paid in July for operating expenses Depreciation expense Cash collections to be received Merchandise purchases to be paid in cash Equipment to be purchased for cash Optimum wishes to maintain a minimum cash balance of *Dividends are payable to shareholders of record on declaration date, 30 days after declaration. Required: 1. Prepare a cash budget for the month ending July 31, 2021, indicating how much, if anything, Optimum will need to borrow to meet its minimum cash requirement. (Leave no cells blank - enter "O" wherever required).
Fanning Medical Clinic has budgeted the following cash flows. January $105,000 February $111,000 March Cash receipts Cash payments For inventory purchases For S&A expenses $131,000 92,500 33,500 74,500 34,500 87,500 29,500 Fanning Medical had a cash balance of $10,500 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 3 percent per month. Repayments may be made in any amount available. Fanning 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. (Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage
Valley Trails is preparing the Cash Budget for the upcoming period, and is concerned about their ability to meet their financial obligations in the short term. Following is information relating to Valley's financial performance: Beginning-of-period balances: Accounts Receivable: $108,000 Accounts Payable: $54,000 Accumulated Factory Depreciation: $576,000 Cash: $27,000 Estimates for end-of-period balances: Accounts Receivable: $135,000 Accounts Payable: $36,000 Accumulated Factory Depreciation: $592,000 Budgeted activity levels for the period: Sales: $500,000 Purchases of Direct Materials: $89,600 Direct Labor Wages: $150,000 Manufacturing Overhead: $50,000 Selling and Administrative Expenses: $84,000 Except for purchases of direct materials, all expenses are paid as incurred. What is the budgeted ending cash balance for the period? Select one: O O O a. $178,400 b. $140,400 $152 400
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: Total cash receipts Total cash disbursements 1st Quarter $ 180,000 $ 260,000 Beginning cash balance Total cash receipts Total cash available Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest 2nd Quarter $ 330,000 $ 230,000 The company's beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Required: Prepare the company's cash budget for…
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: Total cash receipts Total cash disbursements 1st Quarter 2nd Quarter $ 350,000 $ 393,000 3rd Quarter $ 400,000 $ 353,000 4th Quarter $ 420,000 $ 373,000 $ 470,000 $ 363,000 The company's beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Required: Prepare the company's cash budget for the upcoming fiscal year. (Repayments, interest, and cash deficiencies should be indicated by a minus sign.) 2nd Quarter…
I need the working solution for the cash balance at the beginning month. Cash Budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: September October November Sales $130,000 $156,000 $205,000 Manufacturing costs 55,000 67,000 74,000 Selling and administrative expenses 46,000 47,000 78,000 Capital expenditures _ _ 49,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $10,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid…
Cash Receipts Budget and Accounts Receivable Aging Schedule Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,760,000 Quarter 2 5,620,000 Quarter 3 3,060,000 Quarter 4 7,720,000 In Shalimar's experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,310,000 and for the fourth quarter of the current year are $7,350,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year 4, current year 1, next year 2, next year 3. next vear 4, next year 2. Construct a cash receipts budget for…

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