prepare cash flow budget based on the following information Items Quarter 1 Quarter 2 Quarter 3 Quarter 4 Gross sales 400,000 500,000 300,000 200,000 Gross purchases 250,000 150,000 200,000 180,000 Paid cash machines and equipment ----- ----- 80,000 ----- Paid cash utilities ----- 400,000 ----- ----- Salary and wages 21000 26000 24000 ----- Interest credit 15000 ----- 10,000 35000 Interest debit 8000 6000 19000 4000 Overhead expenses 4000 3000 3500 3200 Minimum reserve of cash 300,000 300,000 300,000 300,000 If you know that: -The company can borrow money when required with the loan’s interest rate of 10% of the amount borrowed during the period. There are 20% of gross sales are considered as cash sales. Credit sales are collected as follows: 70% in the same quarter of sales, 20% in the following quarter, and 10% in the quarter after. Overhead expenses include 3000 EGP depreciation/ quarter. There are 10% of gross purchases are considered as cash purchases. Debit purchases are paid as follows: 60% in the same quarter of purchases, 25% in the following quarter, and 15% in the quarter after. Eighth: Balance Sheet (B.S.) of the 31/12/2021 Assets Liabilities & Owner's Equity Cash 200,000 Loan Accounts payable 100,000 50,000 A/R 20,000 Capital 195000 Furniture 29000 Machines and equipment 36000 Depreciation (3000) Materials 3000 Merchandise (F.G.) 60,000 Total Assets 345000 Total Liabilities and O'E 345000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

prepare cash flow budget based on the following information

Items	Quarter 1	Quarter 2	Quarter 3	Quarter 4
Gross sales	400,000	500,000	300,000	200,000
Gross purchases	250,000	150,000	200,000	180,000
Paid cash machines and equipment	-----	-----	80,000	-----
Paid cash utilities	-----	400,000	-----	-----
Salary and wages	21000	26000	24000	-----
Interest credit	15000	-----	10,000	35000
Interest debit	8000	6000	19000	4000
Overhead expenses	4000	3000	3500	3200
Minimum reserve of cash	300,000	300,000	300,000	300,000

If you know that:

-The company can borrow money when required with the loan’s interest rate of 10% of the amount borrowed during the period.

There are 20% of gross sales are considered as cash sales.
Credit sales are collected as follows: 70% in the same quarter of sales, 20% in the following quarter, and 10% in the quarter after.
Overhead expenses include 3000 EGP depreciation/ quarter.
There are 10% of gross purchases are considered as cash purchases.
Debit purchases are paid as follows: 60% in the same quarter of purchases, 25% in the following quarter, and 15% in the quarter after.

Eighth:

Balance Sheet (B.S.) of the 31/12/2021

Assets	Liabilities & Owner's Equity
Cash	200,000	Loan Accounts payable	100,000 50,000
A/R	20,000	Capital	195000
Furniture	29000
Machines and equipment	36000
Depreciation	(3000)
Materials	3000
Merchandise (F.G.)	60,000
Total Assets	345000	Total Liabilities and O'E	345000

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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