Problem 7-20A (Algo) Preparing a cash budget LO 7-5 Stuart Medical Clinic has budgeted the following cash flows. March January February $115,000 $121,000 $141,000 Cash receipts Cash payments For inventory purchases For S&A expenses Cash Budget Stuart Medical had a cash balance of $15,500 on January 1. The company desires to maintain a cash cushion of $8,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month, the interest rate is 1 percent per month. Repayments may be made in any amount available. Stuart pays its vendors on the last day of the month also. The company had a monthly $40.000 beginning balance in its line of credit liability account from this year's quarterly results. Section 1: Cash Receipts 97,500 38,500 Required Prepare a cash budget. (Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be indicated with a minus sign.) Total cash available Section 2 Cash Payments 79,500 39,500 Total budgeted disbursements Section 3 Financing Activities 92,500 34,500 January February March

Problem 7-20A (Algo) Preparing a cash budget LO 7-5 Stuart Medical Clinic has budgeted the following cash flows. March January February $115,000 $121,000 $141,000 Cash receipts Cash payments For inventory purchases For S&A expenses Cash Budget Stuart Medical had a cash balance of $15,500 on January 1. The company desires to maintain a cash cushion of $8,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month, the interest rate is 1 percent per month. Repayments may be made in any amount available. Stuart pays its vendors on the last day of the month also. The company had a monthly $40.000 beginning balance in its line of credit liability account from this year's quarterly results. Section 1: Cash Receipts 97,500 38,500 Required Prepare a cash budget. (Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be indicated with a minus sign.) Total cash available Section 2 Cash Payments 79,500 39,500 Total budgeted disbursements Section 3 Financing Activities 92,500 34,500 January February March

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter13: Budgeting And Standard Costs

Section: Chapter Questions

Problem 13.5.1C

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A. Discuss the purpose of the cash budget. B. If the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might the excess cash be used?
Integrity and evaluating budgeting systems The city of Milton has an annual budget cycle that begins on July 1 and ends on June 30. At the beginning of each budget year, an annual budget is established for each department. The annual budget is divided by 12 months to provide a constant monthly static budget. On June 30, all unspent budgeted monies for the budget year from the various city departments must be returned to the General Fund. Thus, if department heads fail to use their budget by year-end, they will lose it. A budget analyst prepared a chart of the difference between the monthly actual and budgeted amounts for the recent fiscal year. The chart was as follows: a. Interpret the chart. b. Suggest an improvement in the budget system.
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11 Skipped Campbell Medical Clinic has budgeted the following cash flows. January February March Cash receipts $104,000 $110,000 $130,000 Cash payments For inventory purchases For S&A expenses 92,000 74,000 33,000 34,000 Campbell Medical had a cash balance of $10,000 on January 1. The company desires to maintain a cash cushion of $9,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 2 percent per month. Repayments may be made in any amount available. Campbell pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this year's quarterly results. Required Prepare a cash budget. (Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be indicated with a minus sign.) January February Cash Budget Section 1: Cash Receipts 87,000 29,000 Total cash available Section 2: Cash…
Problem 14-2OA (Static) Preparing a cash budget LO 14-5 Fayette Medical Clinic has budgeted the following cash flows. January February $240, 000 $232, e00 $272,000 March Cash receipts Cash payments For inventory purchases For SGA expenses 220,000 62, e00 164,000 64,000 190,000 54,000 Fayette Medical had a cash balance of $16,000 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are assumed to be borrowed, in increments of $2,000, and repaid on the last day of each month; the interest rate is 1 percent per month. Repayments may be made in any amount available. Fayette pays its vendors on the last day of the month also. The company had a monthly $80,000 beginning balance in its line of credit liability account from last year's quarterly results. Required Prepare a cash budget. (Any repayments should be indicated with a minus sign. Round intermediate and final answers to the nearest whole dollar amounts.)
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Problem 7-17A (Algo) Preparing a sales budget and schedule of cash receipts LO 7-2 Thornton Pointers Corporation expects to begin operations on January 1, year 1, it will operate as a specialty sales company that sells laser pointers over the Internet. Thornton expects sales in January year 1 to total $400,000 and to increase 20 percent per month in February and March. All sales are on account. Thornton expects to collect 66 percent of accounts receivable in the month of sale, 24 percent in the month following the sale, and 10 percent in the second month following the sale. Required a. Prepare a sales budget for the first quarter of year 1. b. Determine the amount of sales revenue Thornton will report on the year 1 first quarterly pro forma income statement. c. Prepare a cash receipts schedule for the first quarter of year 1. d. Determine the amount of accounts receivable as of March 31, year 1. Complete this question by entering your answers in the tabs below. Required A Required B…
Problem 5 Prepare a cash budget by month for the month quarter ending September 30, 2009, from the following data obtained from the Peninsula Co. Support your solution with schedules of estimated receipts & payments. August P 16,000 150,000 120,000 18,000 2,000 July P 12,000 110.000 90,000 Operating Expenses 15,000 September P 18,000 120,000 110,000 16,000 Cash sales Credit sales Purchases Interest expense Credit are collected 50% in the month of sales. 40% in the month following, 8% in the second month following and 2% uncollectible. Credit sales for May and June are expected to be P100,000 and P90,000 respectively. Purchases of merchandise, all on account are paid 60% in the month of purchase and 40% in the month fallowing. Purchase for June are estimated at 80,000 are paid in the month incurred. Cash balance on June 30, 2009 is P27,000.
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Exercise 9-26 Cash Budgeting (LO 9-3, 9-5) The following information is from Tejas WindowTint's financial records. Month Sales Purchases April May June July $72,000 66,000 60,000 78,000 $42,000 48,000 36,000 54,000 Collections from customers are normally 70 percent in the month of sale, 20 percent in the month following the sale, and 9 percent in the second month following the sale. The balance is expected to be uncollectible. All purchases are on account. Management takes full advantage of the 2 percent discount allowed on purchases paid for by the tenth of the following month. Purchases for August are budgeted at $60,000, and sales for August are forecasted at $66,000. Cash disbursements for expenses are expected to be $14,400 for the month of August. The company's cash balance on August 1 was $22,000. Required: 1. Prepare the expected cash collections during August. 2. Prepare the expected cash disbursements during August. 3. Calculate the expected cash balance on August 31. Answer…
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