Hurzdan, Inc., has a 50-day average collection period and wants to maintain a minimumcash balance of $35 million, which is what the company currently has on hand. Thecompany currently has a receivables balance of $189 million and has developed thefollowing sales and cash disbursement budgets (in millions):Q2Sales$450Total cash disbursement 268 390Beginning receivablesSalesCash collectionsEnding receivablesTotal cash collectionsTotal cash disbursementsNet cash inflowBeginning cash balanceNet cash inflowEnding cash balanceMinimum cash balanceCumulative surplus (deficit)Q1$378Complete the following cash budget for the company. (A negative answer should beIndicated by a minus sign. Do not round Intermediate calculations and enter youranswers in millions rounded to the nearest whole million dollar amount, e.g., 32.)+Q3Q4$531 $495412617Q1HURZDAN, INC.Cash Budget(in millions)378268Q2450390Q3531617Q4495412

Cash budget helps in estimating the inflow and outflow of cash over a specific period like monthly,…

Hurzdan, Inc., has a 50-day average collection period and wants to maintain a minimum cash balance of $35 million, which is what the company currently has on hand. The company currently has a receivables balance of $189 million and has developed the following sales and cash disbursement budgets (in millions): Q1 Q2 Q3 $378 $450 $531 617 Sales Total cash disbursement 268 390 Q4 $495 412 Complete the following cash budget for the company. (A negative answer should be Indicated by a minus sign. Do not round Intermediate calculations and enter your answers in millions rounded to the nearest whole mil on dollar amount, e.g., 32.)

Hurzdan, Inc., has a 50-day average collection period and wants to maintain a minimum cash balance of $35 million, which is what the company currently has on hand. The company currently has a receivables balance of $189 million and has developed the following sales and cash disbursement budgets (in millions): Q1 Q2 Q3 $378 $450 $531 617 Sales Total cash disbursement 268 390 Q4 $495 412 Complete the following cash budget for the company. (A negative answer should be Indicated by a minus sign. Do not round Intermediate calculations and enter your answers in millions rounded to the nearest whole mil on dollar amount, e.g., 32.)

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

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

Hurzdan, Inc., has a 50-day average collection period and wants to maintain a minimum
cash balance of $35 million, which is what the company currently has on hand. The
company currently has a receivables balance of $189 million and has developed the
following sales and cash disbursement budgets (in millions):
Q2
Sales
$450
Total cash disbursement 268 390
Beginning receivables
Sales
Cash collections
Ending receivables
Total cash collections
Total cash disbursements
Net cash inflow
Beginning cash balance
Net cash inflow
Ending cash balance
Minimum cash balance
Cumulative surplus (deficit)
Q1
$378
Complete the following cash budget for the company. (A negative answer should be
Indicated by a minus sign. Do not round Intermediate calculations and enter your
answers in millions rounded to the nearest whole million dollar amount, e.g., 32.)
+
Q3
Q4
$531 $495
412
617
Q1
HURZDAN, INC.
Cash Budget
(in millions)
378
268
Q2
450
390
Q3
531
617
Q4
495
412

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Am. 1113.
es Agarwal, Incorporated, has a 50-day average collection period and wants to maintain a minimum cash balance of $40 million, which is what the company currently has on hand. The company currently has a receivables balance of $198 million and has developed the following sales and cash disbursement budgets (in millions): Sales Total cash disbursement Beginning receivables Sales Cash collections Ending receivables Total cash collections Total cash disbursements Net cash inflow Beginning cash balance Net cash inflow Q1 $ 459 302 Ending cash balance Minimum cash balance Cumulative surplus (deficit) Q2 $531 466 Complete the following cash budget for the company. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in millions rounded to the nearest whole million dollar amount, e.g., 32. Q1 Q3 $ 612 720 AGARWAL, INCORPORATED Cash Budget (in millions) 459 Q4 $576 477 302 Q2 531 466 Q3 612 720 Q4 576 477
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