The controller of Optimum wishes to improve the company's control system by preparing a monthly cash budget. The followinginformation relates to the month ending July 31, 2021:June 30, 2021, cash balanceDividends were declared on June 15*$130,00044, 00083,60013,000198,000122,40047,00070, 000Cash expenditures to be paid in July for operating expensesDepreciation expenseCash collections to be receivedMerchandise purchases to be paid in cashEquipment to be purchased for cashOptimum wishes to maintain a minimum cash balance of*Dividends are payable to shareholders of record on declaration date, 30 days after declaration.Required:1. Prepare a cash budget for the month ending July 31, 2021, indicating how much, if anything, Optimum will need to borrow to meet itsminimum cash requirement. (Leave no cells blank - enter "O" wherever required).

Formula: Ending cash balance = Optimum wishes to maintain a minimum cash balance - Total available…

The controller of Optimum wishes to improve the company's control system by preparing a monthly cash budget. The following information relates to the month ending July 31, 2021: June 30, 2021, cash balance Dividends were declared on June 15* Cash expenditures to be paid in July for operating expenses Depreciation expense Cash collections to be received $130,000 44, 000 83,600 13,000 Merchandise purchases to be paid in cash Equipment to be purchased for cash Optimum wishes to maintain a minimum cash balance of 198,000 122,400 47,000 70,000 *Dividends are payable to shareholders of record on declaration date, 30 days after declaration.

The controller of Optimum wishes to improve the company's control system by preparing a monthly cash budget. The following information relates to the month ending July 31, 2021: June 30, 2021, cash balance Dividends were declared on June 15* Cash expenditures to be paid in July for operating expenses Depreciation expense Cash collections to be received $130,000 44, 000 83,600 13,000 Merchandise purchases to be paid in cash Equipment to be purchased for cash Optimum wishes to maintain a minimum cash balance of 198,000 122,400 47,000 70,000 *Dividends are payable to shareholders of record on declaration date, 30 days after declaration.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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

The controller of Optimum wishes to improve the company's control system by preparing a monthly cash budget. The following
information relates to the month ending July 31, 2021:
June 30, 2021, cash balance
Dividends were declared on June 15*
$130,000
44, 000
83,600
13,000
198,000
122,400
47,000
70, 000
Cash expenditures to be paid in July for operating expenses
Depreciation expense
Cash collections to be received
Merchandise purchases to be paid in cash
Equipment to be purchased for cash
Optimum wishes to maintain a minimum cash balance of
*Dividends are payable to shareholders of record on declaration date, 30 days after declaration.
Required:
1. Prepare a cash budget for the month ending July 31, 2021, indicating how much, if anything, Optimum will need to borrow to meet its
minimum cash requirement. (Leave no cells blank - enter "O" wherever required).

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