Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Chapter 29, Problem 13PS
Summary Introduction
To determine: The cumulative short-term financing required by preparing cash budget of company R.
Cash budget is plan or map of expected
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The following table lists data from the budget of Ritewell Publishers. Half the company's sales are for cash immediately; the other half
are paid for with a one-month delay. The company pays all its credit purchases with a one-month delay. Credit purchases in January
were $48, and total sales in January were $216. Assume all expenses, other than purchases, are cash transactions.
Total sales
February
$ 236
March
$ 256
April
$ 216
Purchases of materials
For cash
88
98
78
For credit
58
48
58
Other expenses
48
48
48
Taxes, interest, and dividends
28
28
28
Capital investment
25
0
0
Complete the cash budget in the following table.
Note: Negative amounts should be indicated by a minus sign.
Particulars
Sources of cash:
Collections on cash sales
Collections on accounts receivables
Total sources of cash
Uses of cash:
Payments of accounts payable
Cash purchases of materials
Other expenses
Capital expenditures
Taxes, interest, and dividends
Total uses of cash
February
March
April
Net cash inflow…
The following information is available for Zetrov Company. a. The cash budget for March shows an ending bank loan of $10,000 and an ending cash balance of $50,000. b. The sales budget for March indicates sales of $140,000. Accounts receivable are expected to be 70% of the current-month sales. c. The merchandise purchases budget indicates that $89,000 in merchandise will be purchased on account in March. Purchases on account are paid 100% in the month following the purchase. Ending inventory for March is predicted to be 600 units at a cost of $35 each. d. The budgeted income statement for March shows net income of $48,000. Depreciation expense of $1,000 and $26,000 in income tax expense were used in computing net income for March. Accrued taxes will be paid in April. e. The balance sheet for February shows equipment of $84,000 with accumulated depreciation of $46,000, common stock of $25,000, and ending retained earnings of $8,000. There are no changes budgeted in the Equipment or…
The following information is available for Zetrov Company.
a. The cash budget for March shows an ending bank loan of $17,000 and an ending cash balance of $70,500.
b. The sales budget for March indicates sales of $134,000. Accounts receivable are expected to be 60% of the current-month sales.
c. The merchandise purchases budget indicates that $90,400 in merchandise will be purchased on account in March. Purchases on
account are paid 100% in the month following the purchase. Ending inventory for March is predicted to be 740 units at a cost of $35
each.
d. The budgeted income statement for March shows net income of $49,400. Depreciation expense of $2,400 and $27,400 in income
tax expense were used in computing net income for March. Accrued taxes will be paid in April.
e. The balance sheet for February shows equipment of $82,600 with accumulated depreciation of $31,400, common stock of
$32,000, and ending retained earnings of $9,400. There are no changes budgeted in the equipment or…
Chapter 29 Solutions
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 29 - Prob. 1PSCh. 29 - Prob. 2PSCh. 29 - Sources and uses of cash and working capital...Ch. 29 - Sources and uses of cash State whether each of the...Ch. 29 - Prob. 5PSCh. 29 - Forecasts of payables Dynamic Futon forecasts the...Ch. 29 - Prob. 8PSCh. 29 - Prob. 9PSCh. 29 - Prob. 10PSCh. 29 - Prob. 11PS
Ch. 29 - Cash cycle A firm is considering several policy...Ch. 29 - Prob. 13PSCh. 29 - Collections on receivables If a firm pays its...Ch. 29 - Short-term financial plans Which items in Table...Ch. 29 - Prob. 16PSCh. 29 - Short-term financial plans Work out a short-term...Ch. 29 - Prob. 18PSCh. 29 - Prob. 19PSCh. 29 - Long-term financial plans Corporate financial...Ch. 29 - Prob. 21PSCh. 29 - Long-term financial plans a. Use the Dynamic...Ch. 29 - Long-term plans The financial statements of Eagle...Ch. 29 - Forecast growth rate a. What is the internal...Ch. 29 - Forecast growth rate Bio-Plasma Corp. is growing...Ch. 29 - Long-term plans Table 29.19 shows the 2016...
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