(a) Prepare Swifty's cash budget for the fourth quarter, considering only required expenditures. Present amounts for each month and for the quarter overall. October November De Swifty Corp's accounting team is putting together the cash budget for the fourth quarter of the current year. Budgeted cash receipts and cash disbursements for DM are listed below, along with other budgeted costs and additional information. October November December Budgeted cash receipts $313,000 $303,000 $328,000 Budgeted cash disbursements for DM purchases 45,300 67,400 50,600 Budgeted DL and MOH cost 138,300 145,400 151,400 Budgeted SG&A cost 124,400 127,900 123,900 . Beginning cash balance on October 1 is $22,400, minimum required balance is $20,000. Budgeted MOH cost includes $11,800 of depreciation each month. Budgeted SG&A cost includes $13,100 of depreciation each month. A line of credit is available from the bank, subject to a 4% annual interest rate; withdrawals must be made on the first of the month, and repayments must be made on the last day of the month. The withdrawals and repayments must be in $500 increments. If excess cash is available, the following spending priorities have been identified (in order of priority). 1. Equipment purchase of $30,000 (must be made at some point during this quarter with available cash or loan from the bank). 2 Research and development of $10,000 per month (could be made for any number of months or none at all). 3. Advertising of $5,000 per month (could be made for any number of months or none at all).
(a) Prepare Swifty's cash budget for the fourth quarter, considering only required expenditures. Present amounts for each month and for the quarter overall. October November De Swifty Corp's accounting team is putting together the cash budget for the fourth quarter of the current year. Budgeted cash receipts and cash disbursements for DM are listed below, along with other budgeted costs and additional information. October November December Budgeted cash receipts $313,000 $303,000 $328,000 Budgeted cash disbursements for DM purchases 45,300 67,400 50,600 Budgeted DL and MOH cost 138,300 145,400 151,400 Budgeted SG&A cost 124,400 127,900 123,900 . Beginning cash balance on October 1 is $22,400, minimum required balance is $20,000. Budgeted MOH cost includes $11,800 of depreciation each month. Budgeted SG&A cost includes $13,100 of depreciation each month. A line of credit is available from the bank, subject to a 4% annual interest rate; withdrawals must be made on the first of the month, and repayments must be made on the last day of the month. The withdrawals and repayments must be in $500 increments. If excess cash is available, the following spending priorities have been identified (in order of priority). 1. Equipment purchase of $30,000 (must be made at some point during this quarter with available cash or loan from the bank). 2 Research and development of $10,000 per month (could be made for any number of months or none at all). 3. Advertising of $5,000 per month (could be made for any number of months or none at all).
Chapter6: Managing Cash Flow
Section: Chapter Questions
Problem 1EP
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Transcribed Image Text:(a) Prepare Swifty's cash budget for the fourth quarter, considering only required expenditures. Present amounts for each month
and for the quarter overall.
October
November
De
Transcribed Image Text:Swifty Corp's accounting team is putting together the cash budget for the fourth quarter of the current year. Budgeted cash
receipts and cash disbursements for DM are listed below, along with other budgeted costs and additional information.
October
November December
Budgeted cash receipts
$313,000 $303,000 $328,000
Budgeted cash disbursements for DM purchases
45,300
67,400
50,600
Budgeted DL and MOH cost
138,300
145,400
151,400
Budgeted SG&A cost
124,400
127,900
123,900
.
Beginning cash balance on October 1 is $22,400, minimum required balance is $20,000.
Budgeted MOH cost includes $11,800 of depreciation each month.
Budgeted SG&A cost includes $13,100 of depreciation each month.
A line of credit is available from the bank, subject to a 4% annual interest rate; withdrawals must be made on the first of
the month, and repayments must be made on the last day of the month. The withdrawals and repayments must be in $500
increments.
If excess cash is available, the following spending priorities have been identified (in order of priority).
1.
Equipment purchase of $30,000 (must be made at some point during this quarter with available cash or loan from
the bank).
2
Research and development of $10,000 per month (could be made for any number of months or none at all).
3.
Advertising of $5,000 per month (could be made for any number of months or none at all).
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