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Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the below table. Sales forecast First $372 (figures in $ millions) A. Cash requirements Cash required for operations Interest on bank loan Total cash required B. Cash raised in quarter Line of credit Total cash raised C. Repayments of bank loan D.Addition to cash balances E. Line of credit Beginning of quarter End of quarter Quarter in Coming Year Second $360 Paymore's labor and administrative expenses are $65 per quarter and interest on long-term debt is $40 per quarter. Paymore's cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. Assume that Paymore can borrow up to $100 from a line of credit at an interest rate of 2% per quarter. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $336. On average, two-thirds of purchases are paid for in the quarter that they are purchased, and one-third are paid in the following quarter. Prepare a short-term financing plan using the above table. (Leave no cells blank. Enter '0' when necessary. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in millions of dollars rounded to 2 decimal places.) S S $ Third $336 First 0.00 0.00 $ Fourth $384 0.00 $ 0.00 Second Quarter Following Year First Quarter $384 0.00 $ 0.00 $ 0.00 Third 0.00 $ 0.00 $ 0.00 Fourth 0.00 0.00 0.00

Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the below table. Sales forecast First $372 (figures in $ millions) A. Cash requirements Cash required for operations Interest on bank loan Total cash required B. Cash raised in quarter Line of credit Total cash raised C. Repayments of bank loan D.Addition to cash balances E. Line of credit Beginning of quarter End of quarter Quarter in Coming Year Second $360 Paymore's labor and administrative expenses are $65 per quarter and interest on long-term debt is $40 per quarter. Paymore's cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. Assume that Paymore can borrow up to $100 from a line of credit at an interest rate of 2% per quarter. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $336. On average, two-thirds of purchases are paid for in the quarter that they are purchased, and one-third are paid in the following quarter. Prepare a short-term financing plan using the above table. (Leave no cells blank. Enter '0' when necessary. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in millions of dollars rounded to 2 decimal places.) S S $ Third $336 First 0.00 0.00 $ Fourth $384 0.00 $ 0.00 Second Quarter Following Year First Quarter $384 0.00 $ 0.00 $ 0.00 Third 0.00 $ 0.00 $ 0.00 Fourth 0.00 0.00 0.00

Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter22: Master Budget (master)
Section: Chapter Questions
Problem 1R: Ranger Industries has provided the following information at June 30: Other information: Average...
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Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the below table. Sales forecast (figures in $ millions) A. Cash requirements First $372 Paymore's labor and administrative expenses are $65 per quarter and interest on long-term debt is $40 per quarter. Paymore's cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. Assume that Paymore can borrow up to $100 from a line of credit at an interest rate of 2% per quarter. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $336. On average, two-thirds of purchases are paid for in the quarter that they are purchased, and one-third are paid in the following quarter. Prepare a short-term financing plan using the above table. (Leave no cells blank. Enter 'O' when necessary. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in millions of dollars rounded to 2 decimal places.) Cash required for operations Interest on bank loan Total cash required B. Cash raised in quarter Line of credit Total cash raised C. Repayments of bank loan D. Addition to cash balances E. Line of credit Beginning of quarter End of quarter Quarter in Coming Year Second $360 Third $336 $ $ $ First 0.00 0.00 $ Fourth $384 0.00 $ 0.00 Second Quarter 0.00 $ 0.00 $ Following Year First Quarter $384 0.00 Third 0.00 $ 0.00 $ 0.00 Fourth 0.00 0.00 0.00
Transcribed Image Text:Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the below table. Sales forecast (figures in $ millions) A. Cash requirements First $372 Paymore's labor and administrative expenses are $65 per quarter and interest on long-term debt is $40 per quarter. Paymore's cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. Assume that Paymore can borrow up to $100 from a line of credit at an interest rate of 2% per quarter. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $336. On average, two-thirds of purchases are paid for in the quarter that they are purchased, and one-third are paid in the following quarter. Prepare a short-term financing plan using the above table. (Leave no cells blank. Enter 'O' when necessary. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in millions of dollars rounded to 2 decimal places.) Cash required for operations Interest on bank loan Total cash required B. Cash raised in quarter Line of credit Total cash raised C. Repayments of bank loan D. Addition to cash balances E. Line of credit Beginning of quarter End of quarter Quarter in Coming Year Second $360 Third $336 $ $ $ First 0.00 0.00 $ Fourth $384 0.00 $ 0.00 Second Quarter 0.00 $ 0.00 $ Following Year First Quarter $384 0.00 Third 0.00 $ 0.00 $ 0.00 Fourth 0.00 0.00 0.00
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