Jane MacDonald, Carroll Financial Analyst, prepared the following sales and cash disbursement estimates for the February-June period of this year. Month Sales Cash Disbursements February 500 400 March 600 300 April 400 600 May 200 500 June 200 200 MacDonald indicates that 30% of sales have been, historically, in cash. 70% of credit sales are collected one month after the sale, and the remaining 30% are collected two months after the sale. The company wants to keep a minimum final balance in its $ 25 cash account. Balances in excess of this amount will be invested in short-term government securities (marketable securities), while any deficits will be financed through short-term bank borrowing (payable securities). The cash balance initially on April 1 is $ 115. Prepare cash budgets for April, May, and June. How much, if any, of the maximum funding would Carroll require to meet its obligations within this three-month period? Prepare an Initial Balance Sheet dated the end of June from the information provided. Determine the value of the following: cash, notes payable, negotiable securities, and accounts receivable.
Jane MacDonald, Carroll Financial Analyst, prepared the following sales and cash disbursement estimates for the February-June period of this year. Month Sales Cash Disbursements February 500 400 March 600 300 April 400 600 May 200 500 June 200 200 MacDonald indicates that 30% of sales have been, historically, in cash. 70% of credit sales are collected one month after the sale, and the remaining 30% are collected two months after the sale. The company wants to keep a minimum final balance in its $ 25 cash account. Balances in excess of this amount will be invested in short-term government securities (marketable securities), while any deficits will be financed through short-term bank borrowing (payable securities). The cash balance initially on April 1 is $ 115. Prepare cash budgets for April, May, and June. How much, if any, of the maximum funding would Carroll require to meet its obligations within this three-month period? Prepare an Initial Balance Sheet dated the end of June from the information provided. Determine the value of the following: cash, notes payable, negotiable securities, and accounts receivable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- Jane MacDonald, Carroll Financial Analyst, prepared the following sales and cash disbursement estimates for the February-June period of this year.
|
Month |
Sales |
Cash Disbursements |
|
February |
500 |
400 |
|
March |
600 |
300 |
|
April |
400 |
600 |
|
May |
200 |
500 |
|
June |
200 |
200 |
MacDonald indicates that 30% of sales have been, historically, in cash. 70% of credit sales are collected one month after the sale, and the remaining 30% are collected two months after the sale. The company wants to keep a minimum final balance in its $ 25 cash account. Balances in excess of this amount will be invested in short-term government securities (marketable securities), while any deficits will be financed through short-term bank borrowing (payable securities). The cash balance initially on April 1 is $ 115.
- Prepare
cash budgets for April, May, and June. - How much, if any, of the maximum funding would Carroll require to meet its obligations within this three-month period?
- Prepare an Initial
Balance Sheet dated the end of June from the information provided. Determine the value of the following: cash, notes payable, negotiable securities, andaccounts receivable .
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