Homework Help is Here – Start Your Trial Now!
Business
Accounting
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

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
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Please do not give image format
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
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Financial Reporting in Hyperinflationary Economies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS