repare the Cash Collection Budget, Cash Payment Budget and a Final Adjusted Cash Budget using the below information for Pick Up Truck Company. The company is expected to end the current year with $20,000 cash, $162,000 in accounts receivable, and $24,862 in accounts payable. The company's sales are all made on credit, with 70% of the balance collected in the quarter of the sale and 30% in the quarter after the sale. The company plans to sell a piece of land in the third quarter for $15,000, its book value. The total cost of raw materials to be purchased (including tires) are: $31,270 in quarter one; $39,530 in quarter two; $60,936 in quarter three; and $69,021 in quarter four. Raw materials purchases are paid for 60% in the quarter of the purchase and 40% in the quarter after the purchase. All other cash expenses are paid for in the quarter they are incurred. Capital expenditures for 20X1 include the purchase of machines for $20,000 in quarter two and $56,000 in quarter three. Income taxes for the current year are paid quarterly with the final payment being made in the first quarter of the following year. The company requires a cash balance of $20,000 at the end of each quarter. Arrangements have been made with the bank to borrow if needed in even increments of $1,000. Assume all borrowings are made at the beginning of the quarter. Borrowings are paid back at the end of the next quarter with interest of 8%.. Dont give handwritten answers thanku
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.
Prepare the Cash Collection Budget, Cash Payment Budget and a Final Adjusted
The company is expected to end the current year with $20,000 cash, $162,000 in
The company's sales are all made on credit, with 70% of the balance collected in the quarter of the sale and 30% in the quarter after the sale.
The company plans to sell a piece of land in the third quarter for $15,000, its book value.
The total cost of raw materials to be purchased (including tires) are: $31,270 in quarter one; $39,530 in quarter two; $60,936 in quarter three; and $69,021 in quarter four.
Raw materials purchases are paid for 60% in the quarter of the purchase and 40% in the quarter after the purchase.
All other cash expenses are paid for in the quarter they are incurred.
Capital expenditures for 20X1 include the purchase of machines for $20,000 in quarter two and $56,000 in quarter three.
Income taxes for the current year are paid quarterly with the final payment being made in the first quarter of the following year.
The company requires a cash balance of $20,000 at the end of each quarter. Arrangements have been made with the bank to borrow if needed in even increments of $1,000. Assume all borrowings are made at the beginning of the quarter. Borrowings are paid back at the end of the next quarter with interest of 8%..
Dont give handwritten answers thanku
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