Bramble Enterprises had a tough month in May, but June's sales and cash activity are looking strong. Bramble had to borrow $3,000 inMay in order to maintain the company's required minimum balance of $5,000. The loan carries an annual interest rate of 6%, withmonthly interest payments required. Loan withdrawals, in $1,000 increments, are assumed to be taken out on the first of the month.Loan payments, also in $1,000 increments, reduce the principal on the last day of the month. The June 1 cash balance is $5,780. Withbudgeted cash receipts of $105,000 and cash disbursements of $102,800 in June, how much of the prior month's loan would Bramblebe able to pay off in June, if any? What is Bramble's projected ending cash balance in June?Loan paid off$1000Projected ending cash balance$6980

Cash Budget -A cash budget is a documented financial plan that outlines the business's anticipated…

ible Enterprises had a tough month in May, but June's sales and cash activity are looking strong. Bramble had to bor ay in order to maintain the company's required minimum balance of $5,000. The loan carries an annual interest rate of onthly interest payments required. Loan withdrawals, in $1,000 increments, are assumed to be taken out on the first o Dan payments, also in $1,000 increments, reduce the principal on the last day of the month. The June 1 cash balance is udgeted cash receipts of $105,000 and cash disbursements of $102,800 in June, how much of the prior month's loan w e able to pay off in June, if any? What is Bramble's projected ending cash balance in June? Loan paid off $ 1000

ible Enterprises had a tough month in May, but June's sales and cash activity are looking strong. Bramble had to bor ay in order to maintain the company's required minimum balance of $5,000. The loan carries an annual interest rate of onthly interest payments required. Loan withdrawals, in $1,000 increments, are assumed to be taken out on the first o Dan payments, also in $1,000 increments, reduce the principal on the last day of the month. The June 1 cash balance is udgeted cash receipts of $105,000 and cash disbursements of $102,800 in June, how much of the prior month's loan w e able to pay off in June, if any? What is Bramble's projected ending cash balance in June? Loan paid off $ 1000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The annual interest rate on a credit card is 17.90% if a payment of $400,00 is made each month, how many months will it take to pay off an unpaid balance of $2,340.727 Assume that no new purchases are made with the credit card It will take months to pay off the unpaid balance. (Do not round until the final answer. Then round up to the nearest integer as needed.)
Heirloom needs to borrow from a local bank for corporate short-term operating purposes. It is willing to pledge unpaid contracts as collateral for a loan. A local bank president is willing to lend Heirloom up to 70% of the value of notes receivable that are not more than 60 days overdue. Heirloom must also provide, by the fifth day of each month, a note receivable aging list for the preceding month and a calculation showing the maximum amount Heirloom may borrow under the agreement. Figure 5-3 shows the employees and external parties that deal with Heirloom. Explain how Heirloom could defraud the bank and how each internal and external party, except the bank, could defraud Heirloom. What risk factor, unusual item, or abnormality would alert you to each fraud? What control weaknesses make each fraud possible? Recommend one or more controls to prevent or detect each means of committing fraud.
You have a balance of $12,000 for your tuition on your American Express credit card. Assume that you make no more charges on the card. Also assume that American Express charges 15% APR and that each month you make only the minimum payment of 5% of the balance. What percentage of the previous balance is paid off each month? Round the percentage to two decimal places. (Hint: Construct a formula for the balance after t minimum payments and simplify the decay factor in order to answer this question.) 3.34 × % Submit Answer Home My Assignments Request Extension
Wontaby Ltd. is extending its credit terms from 30 to 45 days. Sales are expected to increase from $4.78 million to $5.88 million as a result. Wontaby finances short-term assets at the bank at a cost of 10 percent annually. Calculate the additional annual financing cost of this change in credit terms. (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to the nearest whole dollar. Enter answer in whole dollar not in million.) Annual financing cost $ 110000
Last month, Bluesky announced that it would stretch out its bill payments from 30days to 45days. The reason given was that the company wanted to “control costs and optimize cash flow”. The increased payables will be in effect for all of the company’s 4,000 suppliers. a). Why don’t all firms simply increase their payables period to shorten their cash cycles? b). Bluesky lengthened its payables period to “control costs and optimize cash flow”. Exactly what is the cash benefit to Bluesky from this change?
2
Peanut Inc. is evaluating whether to change its credit terms from 2/10 net 30 to 3/10 net 30. At present, 50% of Peanut's sales are paid at day 10. Regardless of the credit terms, half of the customers who do not take the discount are expected to pay on day 30 whereas the remainder will pay 15 days late (no bad debts exist). But as a result of the higher cash discount offered with the new terms, sales are expected to increase from 757,000 to 801,000 per year. Peanut's variable cost ratio is 75% and its cost of funds is 8.7%. All production costs are paid on the day of the sale. Should the change be made?
Bird's Eye Treehouses, Incorporated, a Kentucky company, has determined that a majority of its customers are located in the Pennsylvania area. It therefore is considering using a lockbox system offered by a bank located in Pittsburgh. The bank has estimated that use of the system will reduce collection time by 1.5 days. Assume 365 days a year. Average number of payments per day Average value of payment Variable lockbox fee (per transaction) Annual interest rate on money market securities 880 $830 $.10 3.2% a. What is the NPV of the new lockbox system? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Suppose in addition to the variable charge that there is an annual fixed charge of $3,000 to be paid at the end of each year. What is the NPV now? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely…
To meet any shortfall in the previous question, NewBank will borrow the cash in the fed funds market. Management decides to borrow the needed funds for the remainder of the month (now 29 days). The required yield on a discount basis is 2.9%. What does the balance sheet look like after this transaction?
(B) Receivables: Credit Terms: ABC sold boxes of candles at P1,000 each. Each box costs P750. Daily sales total 500 boxes over its 250-work day year. All sales are on credit. For the coming year, it plans to accept customers who have less desirable credit ratings. Sales are expected to increase by 10%. Average collection period will increase from 40 days to 50 days. Bad debts will increase from 1% to 3% of sales. Operating expenses will stay the same. For profitability analysis, ABC uses an 8% effective interest rate. Compute for the required by filling up the supporting table. Required: How much would the following be assuming that ABC proceeds with its plan to accept the new market group? Increase in gross profit Increase in receivables carrying cost 7. 8. 9. Increase in bad debts 10. Net advantage or disadvantage of the plan Notes: The Increase/(Decrease) column may be computed either by row or later once the Current and Proposed columns are complete. Some parts of the computations…
Cash flow of accounts receivable. Myers and Associates, a famous law firm in California, bills its clients on the first of each month. Clients pay in the following fashion: 40% pay at the end of the first month, 30% pay at the end of the secondmonth, 20% pay at the end of the third month, 5% pay at the end of the fourth month, and 5% default on their bills. Myers wants to know the anticipated cash flow for the first quarter of 2015 if the past billings and anticipated billings follow this same pattern. The actual and anticipated billings are as follows: Fourth Quarter Actual Billings First Quarter Anticipated Billings Oct. Nov. Dec. Jan. Feb. Mar. $316,000 $253,000 $235,000 $266,000 $288,000 $315,000 What is the anticipated cash flow for January of 2015 if past billings and anticipated billings follow this same pattern? (Round to the nearest dollar.)
Please provide answer in text (Without image)