PREPARE CASH BUDGET FOR YEAR 2021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
PREPARE
Use the format if necessary as a guide:
| Cash Balance, January 1, 2021 |
| Add: Collection from Customers |
| Total Cash Available |
| Less: Disbursements |
| Payments for Material Purchases |
| Direct Labor |
| Factory |
| Selling and Administrative Expenses |
| Equipment purchase |
| Tax Expenses |
| Dividends |
| Total Disbursements |
| Excess (deficiency) of cash available over disbursements |
| Investing: |
| Long-term Investment |
| Increments |
| Interest Receivable |
| Total Cash used in Investing |
| Financing: |
| Borowwings |
| Repayments |
| Interest Paid |
| Total Financing |
| Cash Balance, Ending |
Transcribed Image Text:Shrek & Fiona Company, manufacturer of a single product, is preparing their annual budget for 2021:
The following are the assumptions to be used:
Shrek & Fiona Company
Statement of Financial Position
As of December 31, 2020
Current Assets
Current Liabilities
Cash
18,000
Accounts Payable (N2)
240,000
Accounts Receivable (N1)
1,192,000
Taxes Payable
13,200
Less: Uncollectible accounts
(22,400) 1,169,600
Dividends Payable
500,000
Inventories
Total Current Liabilities
753,200
Raw Materials (12,000 pounds)
30,000
Finished Goods (4,000 units)
140,000
170,000
Stockholder's Equity
Common Stock (100,000 shares)
Total Current Assets
1,357,600
500,000
Non-current Assets
Retained Earnings
360,400
Total Stockholder's Equity
Property, plant, and equipment
Less: Accumulated depreciation
320,000
860,400
(64,000)
256,000
Total Assets
1,613,600
Total Liabilities and SHE
1,613,600
N1 2020 3rd quarter sales P2,500,000
P
200,000
2020 4th quarter sales P3,100,000
992,000
P 1,192,000
N2 2020 3rd quarter purchases P300,000
P
75,000
2020 4th quarter purchases P330,000
165,000
P
240,000
Cash Collection Schedule
For 2021
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
Cash Sales
512,000.00
580,800.00
600,160.00
660,176.00
2,353,136.00
Add: Credit Collections
1st Quarter Collections
1,204,224.00
614,400.00
184,320.00
2,002,944.00
2nd Quarter Collections
1,366,041.60
696,960.00
209,088.00
2,272,089.60
3rd Quarter Collections
1,411,576.32
720,192.00
2,131,768.32
4th Quarter Collections
1.552,733.95
1,552,733.95
Total Credit Collections
1,204,224.00
1,980,441.60
2,292,856.32
2,482,013.95
7,959,535.87
Total Cash Collections
1,716,224.00
2,561,241.60
2,893,016.32
3.142,189.95
10,312,671.87
10,312,671.87|
Collection from Customers
1,716,224.00
2,561,241.60
2,893,016.32
3,142,189.95
Transcribed Image Text:1. For cash budget, assume the following:
The company desires to maintain P15,000 minimum cash balance
b. Dividend is declared every end of the 4th quarter of the year P15 per issued and outstanding share and paid
every 2nd quarter of the following year
At the end of the 2nd quarter, the company plans to purchase P100,000 worth of equipment.
d. Any excess cash at the end of the 1st quarter of the year is used to buy long term investments P10,000
increments. 3% interest rate is credited to the company's bank account at the quarter's end based on
original cost of investment
In case of deficit, the company borrow from the bank P10,000 increments, payable in one year, 10% interest
rate is automatically debited to the company's bank account at the end of every quarter.
a.
C.
е.
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