Wildcat, Incorporated, has estimated sales (in millions) for the next four quar follows: Q1 Q2 Q3 Q4 Sales $170 $185 $200 $225 Sales for the first quarter of the following year are projected at $180 million. Ac receivable at the beginning of the year were $71 million. Wildcat has a 45-day col period. Wildcat's purchases from suppliers in a quarter are equal to 45 percent of th

FINANCIAL ACCOUNTING
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Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as
follows:
Q1 Q2 Q3 Q4
Sales $170 $185 $200 $225
Sales for the first quarter of the following year are projected at $180 million. Accounts
receivable at the beginning of the year were $71 million. Wildcat has a 45-day collection
period.
Wildcat's purchases from suppliers in a quarter are equal to 45 percent of the next
quarter's forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and
other expenses run about 25 percent of sales. Interest and dividends are $14 million per
quarter.
Wildcat plans a major capital outlay in the second quarter of $85 million. Finally, the
company started the year with a $54 million cash balance and wishes to maintain a $30
million minimum balance.
a. Complete the following cash budget for Wildcat, Incorporated. (A negative
answer should be indicated by a minus sign. Do not round intermediate
calculations and enter your answers in millions, not dollars, rounded to 2 decimal
places, e.g., 32.16.)
Beginning cash balance
Net cash inflow
Ending cash balance
Minimum cash balance
Cumulative surplus (deficit)
$
WILDCAT, INCORPORATED
Cash Budget
(in millions)
Q1
54.00
Q2
Q3
Q4
Transcribed Image Text:Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as follows: Q1 Q2 Q3 Q4 Sales $170 $185 $200 $225 Sales for the first quarter of the following year are projected at $180 million. Accounts receivable at the beginning of the year were $71 million. Wildcat has a 45-day collection period. Wildcat's purchases from suppliers in a quarter are equal to 45 percent of the next quarter's forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 25 percent of sales. Interest and dividends are $14 million per quarter. Wildcat plans a major capital outlay in the second quarter of $85 million. Finally, the company started the year with a $54 million cash balance and wishes to maintain a $30 million minimum balance. a. Complete the following cash budget for Wildcat, Incorporated. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in millions, not dollars, rounded to 2 decimal places, e.g., 32.16.) Beginning cash balance Net cash inflow Ending cash balance Minimum cash balance Cumulative surplus (deficit) $ WILDCAT, INCORPORATED Cash Budget (in millions) Q1 54.00 Q2 Q3 Q4
Assume that Wildcat can borrow any needed funds on a short-term basis at a rate of 3
percent per quarter and can invest any excess funds in short-term marketable securities
at a rate of 2 percent per quarter.
b-1. Complete the following short-term financial plan for Wildcat, Incorporated. (A
negative answer should be indicated by a minus sign. Leave no cells blank - be
certain to enter "0" wherever required. Do not round intermediate calculations
and enter your answers in millions, not dollars, rounded to 2 decimal places, e.g.,
32.16.)
Target cash balance
Net cash inflow
New short-term investments
Income from short-term investments
Short-term investments sold
New short-term borrowing
Interest on short-term borrowing
Short-term borrowing repaid
Ending cash balance
Minimum cash balance
Cumulative surplus (deficit)
Beginning short-term investments
Ending short-term investments
Beginning short-term debt
Ending short-term debt
WILDCAT, INCORPORATED
Short-Term Financial Plan
Net cash cost
$
(in millions)
Q1
0 $
Q2
0 $
Q3
0
$
b-2.What is the net cash cost (total interest paid minus total investment income earned)
for the year? (A negative answer should be indicated by a minus sign. Do not
round intermediate calculations and enter your answer in millions, not dollars,
rounded to 2 decimal places, e.g., 32.16.)
Q4
Transcribed Image Text:Assume that Wildcat can borrow any needed funds on a short-term basis at a rate of 3 percent per quarter and can invest any excess funds in short-term marketable securities at a rate of 2 percent per quarter. b-1. Complete the following short-term financial plan for Wildcat, Incorporated. (A negative answer should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and enter your answers in millions, not dollars, rounded to 2 decimal places, e.g., 32.16.) Target cash balance Net cash inflow New short-term investments Income from short-term investments Short-term investments sold New short-term borrowing Interest on short-term borrowing Short-term borrowing repaid Ending cash balance Minimum cash balance Cumulative surplus (deficit) Beginning short-term investments Ending short-term investments Beginning short-term debt Ending short-term debt WILDCAT, INCORPORATED Short-Term Financial Plan Net cash cost $ (in millions) Q1 0 $ Q2 0 $ Q3 0 $ b-2.What is the net cash cost (total interest paid minus total investment income earned) for the year? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in millions, not dollars, rounded to 2 decimal places, e.g., 32.16.) Q4
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