Lipton Auto Parts, a family-owned auto parts store, began January with $10,300 cash . Management forecasts.Management forecasts that collections from credit customers will be $11,000 in January and $15,200 in February.The store is scheduled to receive $5,500 cash on a business note receivable in January. Projected cash payments include inventory purchases ($13,200 in January and $13,200 in February) and selling and administrative expenses ($3,100 each month). Requirement 1. Prepare Lipton Auto Parts's cash budget for January and February Requirement 2. How much cash will Lipton Auto Parts borrow in February if collections from customers that month total $14,200 instead of $15,200?
Lipton Auto Parts, a family-owned auto parts store, began January with $10,300 cash . Management forecasts.Management forecasts that collections from credit customers will be $11,000 in January and $15,200 in February.The store is scheduled to receive $5,500 cash on a business note receivable in January. Projected cash payments include inventory purchases ($13,200 in January and $13,200 in February) and selling and administrative expenses ($3,100 each month). Requirement 1. Prepare Lipton Auto Parts's cash budget for January and February Requirement 2. How much cash will Lipton Auto Parts borrow in February if collections from customers that month total $14,200 instead of $15,200?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Lipton Auto Parts, a family-owned auto parts store, began January with $10,300 cash . Management forecasts .Management forecasts that collections from credit customers will be $11,000 in January and $15,200 in February.The store is scheduled to receive $5,500 cash on a business note receivable in January. Projected cash payments include inventory purchases ($13,200 in January and $13,200 in February) and selling and administrative expenses ($3,100 each month).
Requirement 1. Prepare Lipton Auto Parts's cash budget for January and February
Requirement 2. How much cash will Lipton Auto Parts borrow in February if collections from customers that month total $14,200 instead of $15,200?
Transcribed Image Text:tenng in the labeis, then enter in the amounts för January first and F
Lipton Auto Parts
Cash Budget
January and February
January
February
Beginning cash balance
Cash receipts from customerS
Cash receipt on note receivable
Cash available
Cash payments.
Purchases of inventory
Selling and administrative expenses
Total cash payments
Ending cash balance before financing
Less:
Minimum cash balance desired
Projected cash excess (deficiency)
Total effects of financing
Ending cash balance
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education