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Required 1 Required 2 Prepare a cash budget, by month and in total, for the three-month period. Assume the $79,000 loan is made on April 1 and repaid with interest on June 30. Note: Cash deficiency, repayments and interest should be indicated by a minus sign. Beginning cash balance Add receipts: Collections from customers Total cash available Less cash disbursements: Merchandise purchases Payroll Lease payments Advertising Equipment purchases Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Prime Products Cash Budget April Total financing Ending cash balance < Required 1 May Required 2 > June Quarter

Required 1 Required 2 Prepare a cash budget, by month and in total, for the three-month period. Assume the $79,000 loan is made on April 1 and repaid with interest on June 30. Note: Cash deficiency, repayments and interest should be indicated by a minus sign. Beginning cash balance Add receipts: Collections from customers Total cash available Less cash disbursements: Merchandise purchases Payroll Lease payments Advertising Equipment purchases Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Prime Products Cash Budget April Total financing Ending cash balance < Required 1 May Required 2 > June Quarter

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a cash budget, by month and in total, for the three-month period. Assume the $79,000 loan is made on April 1 and repaid with interest on June 30. Note: Cash deficiency, repayments and interest should be indicated by a minus sign. Beginning cash balance Add receipts: Collections from customers Total cash available Less cash disbursements: Merchandise purchases Payroll Lease payments Advertising Equipment purchases Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Prime Products Cash Budget April Total financing Ending cash balance < Required 1 May Required 2 > June Quarter
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a cash budget, by month and in total, for the three-month period. Assume the $79,000 loan is made on April 1 and repaid with interest on June 30. Note: Cash deficiency, repayments and interest should be indicated by a minus sign. Beginning cash balance Add receipts: Collections from customers Total cash available Less cash disbursements: Merchandise purchases Payroll Lease payments Advertising Equipment purchases Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Prime Products Cash Budget April Total financing Ending cash balance < Required 1 May Required 2 > June Quarter
Prime Products hopes to borrow $79,000 on April 1 and repay it plus interest of $1,140 on June 30. The following data are available for the months April through June, during which the loan will be used: a. On April 1, the start of the loan period, the cash balance will be $16,500. Accounts receivable on April 1 will total $190,400, of which $163,200 will be collected during April and $21,760 will be collected during May. The remainder will be uncollectible. b. The company estimates 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% are bad debts that are never collected. Budgeted sales and expenses for the three- month period follow: Sales (all on account) Merchandise purchases Payroll Lease payments Advertising Equipment purchases Depreciation April $ 312,000 $ 204,000 $ 24,000 $ 24,800 $ 79,200 $ 17, 200 Required 1 Required 2 c. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid in April, total $160,000. May $ 428,000 $ 162,000 $ 24,000 $ 24,800 $ 79,200 $ 17,200 Required: 1. Calculate the expected cash collections for April, May, and June, and for the three months in total. 2. Prepare a cash budget, by month and in total, for the three-month period. Assume the $79,000 loan is made on April 1 and repaid with interest on June 30. Total cash collections Complete this question by entering your answers in the tabs below. June $ 319,000 $ 178,500 $ 18,900 $ 24,800 $74,480 $ 78,000 $ 17,200 Calculate the expected cash collections for April, May, and June, and for the three months in total. Schedule of Expected Cash Collections April May < Required 1 June Quarter Required 2 >
Transcribed Image Text:Prime Products hopes to borrow $79,000 on April 1 and repay it plus interest of $1,140 on June 30. The following data are available for the months April through June, during which the loan will be used: a. On April 1, the start of the loan period, the cash balance will be $16,500. Accounts receivable on April 1 will total $190,400, of which $163,200 will be collected during April and $21,760 will be collected during May. The remainder will be uncollectible. b. The company estimates 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% are bad debts that are never collected. Budgeted sales and expenses for the three- month period follow: Sales (all on account) Merchandise purchases Payroll Lease payments Advertising Equipment purchases Depreciation April $ 312,000 $ 204,000 $ 24,000 $ 24,800 $ 79,200 $ 17, 200 Required 1 Required 2 c. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid in April, total $160,000. May $ 428,000 $ 162,000 $ 24,000 $ 24,800 $ 79,200 $ 17,200 Required: 1. Calculate the expected cash collections for April, May, and June, and for the three months in total. 2. Prepare a cash budget, by month and in total, for the three-month period. Assume the $79,000 loan is made on April 1 and repaid with interest on June 30. Total cash collections Complete this question by entering your answers in the tabs below. June $ 319,000 $ 178,500 $ 18,900 $ 24,800 $74,480 $ 78,000 $ 17,200 Calculate the expected cash collections for April, May, and June, and for the three months in total. Schedule of Expected Cash Collections April May < Required 1 June Quarter Required 2 >
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