CHAPTER 4: THE CASH BUDGET1. The Right Target, Inc., a marketing research and consulting firm, is working on a cash budgetfor July to December 2017. The staff has projected the following cash collections and payments:CollectionsPaymentsCash Sales$10,000Credit Sales Purchases$20,000 $15,000JulyAugust$12,000$24,000 $18,000$28,000 $21,000September $14,000October$16,000$32,000 $24,000November$20,000$40,000December$25,000$50,000a) If the ending cash balance as of June 30, 2017 was $10,000, determine the firm's forecasted monthlycash balance.@2Wb)The staff at The Right Target, Inc. wants to know how much they would need to borrow each month ifthe minimum ending cash balance is $30,000 and the annual interest rate is 7%.c)Determine the impact on the ending cash balance if the firm uses any cash surplus above the requiredminimum cash balance to pay off its short-term borrowing monthly.SXcommand#Month320EDF3C$4gogRF4F%5V2TG6BYH&7$7,200$8,400$9,600$30,000 $12,000$37,500 $15,00044F7N*8Wages Miscellaneous Expenses$6000$1,500J11FBM(9➤➤KOV10$2,000$2,500$3,000$4,000$4,500F10PAcommandGINE.{+ 11altGoptiondel

Cash budget means an estimation of the cash flowsof a business over a specific period of timeEnding…

The Right Target, Inc., a marketing research and consulting firm, is working on a cash budget for July to December 2017. The staff has projected the following cash collections and payments= Collections Payments Month July August September October November December Cash Sales $10,000 $12,000 $14,000 $16,000 $20,000 $25,000 Credit Sales Purchases Wages Miscellaneous Expenses $6000 $1,500 $20,000 $15,000 $24,000 $18,000 $7,200 $28,000 $21,000 $8,400 $32,000 $24,000 $9,600 $40,000 $30,000 $12,000 $50,000 $37,500 $15,000 $2,000 $2,500 $3,000 $4,000 $4,500 a) If the ending cash balance as of June 30, 2017 was $10,000, determine the firm's forecasted monthly cash balance. b) The staff at The Right Target, Inc. wants to know how much they would need to borrow each month if the minimum ending cash balance is $30,000 and the annual interest rate is 7%.

The Right Target, Inc., a marketing research and consulting firm, is working on a cash budget for July to December 2017. The staff has projected the following cash collections and payments= Collections Payments Month July August September October November December Cash Sales $10,000 $12,000 $14,000 $16,000 $20,000 $25,000 Credit Sales Purchases Wages Miscellaneous Expenses $6000 $1,500 $20,000 $15,000 $24,000 $18,000 $7,200 $28,000 $21,000 $8,400 $32,000 $24,000 $9,600 $40,000 $30,000 $12,000 $50,000 $37,500 $15,000 $2,000 $2,500 $3,000 $4,000 $4,500 a) If the ending cash balance as of June 30, 2017 was $10,000, determine the firm's forecasted monthly cash balance. b) The staff at The Right Target, Inc. wants to know how much they would need to borrow each month if the minimum ending cash balance is $30,000 and the annual interest rate is 7%.

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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