TABLE 6-8 Pro Forma Cash Budget Monthly Cash Recelpts Actual Sales 2012 Pro Forma Sales and Cash Recelpts 2013 October November December January February March April мay June July August Seprember October November December Sales $17,625 $20,250 $22,500 $13,000 $14,500 $14,000 $19,000 $23,000 $24,500 $21,000 $17,500 $23,000 $23,500 $27,000 $30,000 Current Month Collection at 30% 5,288 6,075 6,750 3,900 4,350 4,200 5,700 6,900 7,350 6,300 5,250 6,900 7,050 8,100 9,000 of Sales Outstanding Current Month Accounts Recelvable (AR) 12,338 14.175 15,750 9,100 10,150 9,800 13,300 16,100 17,150 14,700 12,250 16,100 16,450 18,900 21,000 60% of AR Collected Month 7,403 8,505 9,450 5,460 6,090 5,880 7,980 9,660 10,290 8,820 7,350 9,660 9,870 11,340 Following Sale 40% of AR Collected In Second Month Following Sale Total Recelpts 4,935 5,670 6,300 3,640 4,060 3,920 5,320 6,440 6,860 5,ве0 4,900 6,440 6,580 $20,190 $19,020 $16,110 $13,930 $15,640 $18,800 $2,330 $23,030 $20,930 $20,130 $21,610 $24,410 $26,920 Monthly Cash Payments Accounts Payable (AP) Previous $10,125 $11,250 $ 6,500 $ 7,250 $ 7,000 $ 9,500 $11,500 $12,250 $10,500 $ 8,750 $11,500 $11,750 $13,500 Month 8,450 Operating Expenses Interest Payments Total Payments 8,450 567 $20,267 $15,517 $16,267 $16,017 $18,517 $20,517 $21,267 $19,517 8,450 8,450 8,450 8,450 8,450 8,450 567 8,450 8,450 567 $20,517 8,450 8,450 567 $22,517 567 567 567 567 Б87 Б67 567 567 $17,767 $20,767 Monthly Cash Budget Total Recelpts Total Payments Net Cash Flow $19,020 $16,110 $13,930 $15,640 $18,800 $2,330 $23,030 $20,930 20,267 $(1,247) $ 593 $12,337) S (377) $ 283 $ 1,813 $ 1,763 S 1,413 $20,130 17,767 $ 2,363 $21,610 $24,410 20,767 $ 1,093 $ 3,643 $26,920 22,517 $ 4,403 15,517 16,267 16,017 18,517 20,517 21,267 19,517 20,517 Cash Budget With Borrowing and Repayment $ (1,247) $ 593 $ (2,337) $ (377) $ 283 $ 1,813 $ 1,763 $ 1,413 4,000 3,623 377 $ 2,363 4,000 6,363 (2,363) $ 1,093 4,000 5,093 (1,093) 3,640 $ 3,643 4,000 7,643 (3,640) $ 4,403 4,003 8,406 Net Cash Flow Beginning Cash Balance Total Cash Balance 4,000 4,000 4,000 $ 2,753 $ 4,593 $ 1,663 (593) 4,000 4,283 4,000 5,763 (1,813) (1,763) (1,413) 4,000 5,813 4,000 5,413 Monthly Loan or (Repayment) 1,247 2,337 (283) Cumulative Loan Balance 9000 10,247 9,654 11,991 12,368 12,085 10,272 8,509 7,096 4,733 Ending Cash Balance $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 S 4,000 $ 4,000 $ 4,000 $ 4,003 S 8,406
TABLE 6-8 Pro Forma Cash Budget Monthly Cash Recelpts Actual Sales 2012 Pro Forma Sales and Cash Recelpts 2013 October November December January February March April мay June July August Seprember October November December Sales $17,625 $20,250 $22,500 $13,000 $14,500 $14,000 $19,000 $23,000 $24,500 $21,000 $17,500 $23,000 $23,500 $27,000 $30,000 Current Month Collection at 30% 5,288 6,075 6,750 3,900 4,350 4,200 5,700 6,900 7,350 6,300 5,250 6,900 7,050 8,100 9,000 of Sales Outstanding Current Month Accounts Recelvable (AR) 12,338 14.175 15,750 9,100 10,150 9,800 13,300 16,100 17,150 14,700 12,250 16,100 16,450 18,900 21,000 60% of AR Collected Month 7,403 8,505 9,450 5,460 6,090 5,880 7,980 9,660 10,290 8,820 7,350 9,660 9,870 11,340 Following Sale 40% of AR Collected In Second Month Following Sale Total Recelpts 4,935 5,670 6,300 3,640 4,060 3,920 5,320 6,440 6,860 5,ве0 4,900 6,440 6,580 $20,190 $19,020 $16,110 $13,930 $15,640 $18,800 $2,330 $23,030 $20,930 $20,130 $21,610 $24,410 $26,920 Monthly Cash Payments Accounts Payable (AP) Previous $10,125 $11,250 $ 6,500 $ 7,250 $ 7,000 $ 9,500 $11,500 $12,250 $10,500 $ 8,750 $11,500 $11,750 $13,500 Month 8,450 Operating Expenses Interest Payments Total Payments 8,450 567 $20,267 $15,517 $16,267 $16,017 $18,517 $20,517 $21,267 $19,517 8,450 8,450 8,450 8,450 8,450 8,450 567 8,450 8,450 567 $20,517 8,450 8,450 567 $22,517 567 567 567 567 Б87 Б67 567 567 $17,767 $20,767 Monthly Cash Budget Total Recelpts Total Payments Net Cash Flow $19,020 $16,110 $13,930 $15,640 $18,800 $2,330 $23,030 $20,930 20,267 $(1,247) $ 593 $12,337) S (377) $ 283 $ 1,813 $ 1,763 S 1,413 $20,130 17,767 $ 2,363 $21,610 $24,410 20,767 $ 1,093 $ 3,643 $26,920 22,517 $ 4,403 15,517 16,267 16,017 18,517 20,517 21,267 19,517 20,517 Cash Budget With Borrowing and Repayment $ (1,247) $ 593 $ (2,337) $ (377) $ 283 $ 1,813 $ 1,763 $ 1,413 4,000 3,623 377 $ 2,363 4,000 6,363 (2,363) $ 1,093 4,000 5,093 (1,093) 3,640 $ 3,643 4,000 7,643 (3,640) $ 4,403 4,003 8,406 Net Cash Flow Beginning Cash Balance Total Cash Balance 4,000 4,000 4,000 $ 2,753 $ 4,593 $ 1,663 (593) 4,000 4,283 4,000 5,763 (1,813) (1,763) (1,413) 4,000 5,813 4,000 5,413 Monthly Loan or (Repayment) 1,247 2,337 (283) Cumulative Loan Balance 9000 10,247 9,654 11,991 12,368 12,085 10,272 8,509 7,096 4,733 Ending Cash Balance $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 S 4,000 $ 4,000 $ 4,000 $ 4,003 S 8,406
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
Your projected sales for the first 3 months of next year are as follows:
January, $15,000; February, $20,000; and March, $25,000. Based on last
year’s data, cash sales are 20 percent of total sales for each month. Of the
40 percent are collected in the second month following the sale. Sales for
November of the current year are $15,000 and for December are $17,000.
You have the following estimated payments: January, $4,500; February,
$5,500; and March, $5,200.
a. Using the format from the pro forma
monthly cash budget for January, February, and March?
b. What will your accounts receivable be for the beginning of April?
c. Will your company have any borrowing requirements for any month during
this 3-month period?
Transcribed Image Text:TABLE 6-8 Pro Forma Cash Budget
Monthly Cash Recelpts
Actual Sales 2012
Pro Forma Sales and Cash Recelpts 2013
October November December January February March
April
мay
June
July
August Seprember October November December
Sales
$17,625 $20,250
$22,500
$13,000 $14,500 $14,000 $19,000 $23,000 $24,500 $21,000 $17,500
$23,000
$23,500 $27,000
$30,000
Current Month Collection at 30%
5,288
6,075
6,750
3,900
4,350
4,200
5,700
6,900
7,350
6,300
5,250
6,900
7,050
8,100
9,000
of Sales
Outstanding Current Month
Accounts Recelvable (AR)
12,338
14.175
15,750
9,100
10,150
9,800 13,300
16,100
17,150
14,700
12,250
16,100
16,450
18,900
21,000
60% of AR Collected Month
7,403
8,505
9,450
5,460
6,090
5,880
7,980
9,660
10,290
8,820
7,350
9,660
9,870
11,340
Following Sale
40% of AR Collected In Second
Month Following Sale
Total Recelpts
4,935
5,670
6,300
3,640
4,060
3,920
5,320
6,440
6,860
5,ве0
4,900
6,440
6,580
$20,190
$19,020 $16,110 $13,930 $15,640 $18,800 $2,330 $23,030 $20,930
$20,130
$21,610 $24,410
$26,920
Monthly Cash Payments
Accounts Payable (AP) Previous
$10,125
$11,250 $ 6,500
$ 7,250 $ 7,000 $ 9,500 $11,500 $12,250 $10,500
$ 8,750
$11,500
$11,750
$13,500
Month
8,450
Operating Expenses
Interest Payments
Total Payments
8,450
567
$20,267 $15,517 $16,267 $16,017 $18,517 $20,517 $21,267 $19,517
8,450
8,450
8,450
8,450
8,450
8,450
567
8,450
8,450
567
$20,517
8,450
8,450
567
$22,517
567
567
567
567
Б87
Б67
567
567
$17,767
$20,767
Monthly Cash Budget
Total Recelpts
Total Payments
Net Cash Flow
$19,020 $16,110 $13,930 $15,640 $18,800 $2,330 $23,030 $20,930
20,267
$(1,247) $ 593 $12,337) S (377) $ 283 $ 1,813 $ 1,763 S 1,413
$20,130
17,767
$ 2,363
$21,610
$24,410
20,767
$ 1,093 $ 3,643
$26,920
22,517
$ 4,403
15,517
16,267
16,017
18,517 20,517 21,267
19,517
20,517
Cash Budget With Borrowing and Repayment
$ (1,247) $ 593 $ (2,337) $ (377) $ 283 $ 1,813 $ 1,763 $ 1,413
4,000
3,623
377
$ 2,363
4,000
6,363
(2,363)
$ 1,093
4,000
5,093
(1,093)
3,640
$ 3,643
4,000
7,643
(3,640)
$ 4,403
4,003
8,406
Net Cash Flow
Beginning Cash Balance
Total Cash Balance
4,000
4,000
4,000
$ 2,753 $ 4,593 $ 1,663
(593)
4,000
4,283
4,000
5,763
(1,813) (1,763) (1,413)
4,000
5,813
4,000
5,413
Monthly Loan or (Repayment)
1,247
2,337
(283)
Cumulative Loan Balance
9000
10,247
9,654
11,991
12,368
12,085
10,272
8,509
7,096
4,733
Ending Cash Balance
$ 4,000
$ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 $ 4,000 S 4,000
$ 4,000
$ 4,000
$ 4,003
S 8,406
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