Cheddar's Café is preparing its cash budget for August. At the beginning of the month, the café expects to have $17,500 in total available cash. Over the course of the month, it expects to make $12,250 in cash disbursements and obtain $3,750 in financing. What is Cheddar's anticipated ending cash balance for August? O $9,000 O $5,250 O $26,000 O $1,500
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Cheddar's Café is preparing its cash budget for August. At the beginning of the month, the café expects to have $17,500 in total available cash. Over the course of the month, it expects to make $12,250 in cash disbursements and obtain $3,750 in financing. What is Cheddar's anticipated ending cash balance for August? O $9,000 O $5,250 O $26,000 O $1,500
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- A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent 50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of 40,000, marketable securities of 75,000, and accounts receivable of 300,000 (60,000 from July sales and 240,000 from August sales). Sales on account for July and August were 200,000 and 240,000, respectively. Current liabilities as of September 1 include 40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 55,000 will be made in October. Bridgeports regular quarterly dividend of 25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of 50,000. Instructions Prepare a monthly cash budget and supporting schedules for September, October, and November. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2019 and 2020: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2019. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal, and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.
- Analyze Johnson Stores staffing budget for holidays Johnson Stores is planning its staffing for the upcoming holiday season. From past history, the store determines that it needs one additional sales clerk for each 12,000 in daily sales. The average daily sales is anticipated to increase by 96,000 from Black Friday until Christmas Eve, or 27 shopping days. Each additional sales clerk will work an eight-hour shift and will be paid 14 per hour. A. Determine the amount to budget for additional sales clerks for the holiday season. B. If Johnson Stores has an average 40% gross profit on sales, should it add the staff suggested by your answer in (A)? That is, is it profitable to staff for the increased sales in (A)?Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is collected in the month of sale, 25% is collected the month after the sale, and 5% is collected the second month after the sale. How much cash will be collected in August if sales are estimated as $75,000 in June, $65,000 in July, and $90,000 in August?Pilsner Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: Pilsner typically pays 25% on account in the month of billing and 75% the next month. Required: 1. How much cash is required for payments on account in May? 2. How much cash is expected for payments on account in June?
- Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for July. He plans to develop the budget from the following information: a. Of all sales, 40% are cash sales. b. Of credit sales, 45% are collected within the month of sale. Half of the credit sales collected within the month receive a 2% cash discount (for accounts paid within 10 days). Thirty percent of credit sales are collected in the following month; remaining credit sales are collected the month thereafter. There are virtually no bad debts. c. Sales for the second two quarters of the year follow. (Note: The first 3 months are actual sales, and the last 3 months are estimated sales.) d. The company sells all that it produces each month. The cost of raw materials equals 26% of each sales dollar. The company requires a monthly ending inventory of raw materials equal to the coming months production requirements. Of raw materials purchases, 50% is paid for in the month of purchase. The remaining 50% is paid for in the following month. e. Wages total 105,000 each month and are paid in the month incurred. f. Budgeted monthly operating expenses total 376,000, of which 45,000 is depreciation and 6,000 is expiration of prepaid insurance (the annual premium of 72,000 is paid on January 1). g. Dividends of 130,000, declared on June 30, will be paid on July 15. h. Old equipment will be sold for 25,200 on July 4. i. On July 13, new equipment will be purchased for 173,000. j. The company maintains a minimum cash balance of 20,000. k. The cash balance on July 1 is 27,000. Required: Prepare a cash budget for July. Give a supporting schedule that details the cash collections from sales.PIOLO COMPANY is currently preparing its cash budget for next month and has gathered the following information: Expected cash receipts P39,400 Expected disbursements: Direct materials P12,000 Direct labor P9,000 Manufacturing overhead P11,500 Selling and administrative expenses P22,000 The beginning cash balance will be P6,000 and the company requires a minimum cash balance at the end of the month of P5,000. How much will PIOLO need to borrow to meet its cash needs for the month?ABC Farm is preparing a collection budget for the year. Sales are expected to be P100,000 in January; P200,000 in February; and P300,000 in March. Approximately 60% of the sale is collected during the month of sale and the other 40% is collected in the following month. What is the ending accounts receivable balance of March? 1. P 80,000 2. P120,000 3. P180,000 4. P200,000 1 O 2 O 4
- From the following information, prepare a monthly cash budget for the three months ending 31st December 2023. Month June July August September October November December Materials Wages 1,800 650 2,000 750 2,400 750 2,250 750 2.300 800 2,500 2,600 900 1,000 The credit terms are as follows: 10% of sales are in cash. 3 months to debtors. 2 months from Creditors. Sales 3,000 3,250 3,500 3,750 4,000 4,250 4,500 The lag in payment for wages is 1/4 month and 1/2 month for overheads. The cash and bank balance on 1st October is expected to be RO 1,500. Other information is given as follows: Admin. Selling, etc 160 160 175 175 200 200 225 Production 225 225 250 300 300 350 350 Preference share dividends @ 5% on RO 50,000 are to be paid on 1st December. Calls on 250 equity shares @RO 2 per share are expected on 1st November. Dividends from investments amounting to RO 250 are expected on 31st December. Income tax (advance) is to be paid in December RO 1,500 Plant and machinery are to be installed…Baltimore Baking is preparing its cash budget and expects to have sales of $30,000 in January, $35,000 in February, and $35,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March? O a. $29,700 O b. $24,057 O c. $33,000 O d. $26,730 Oe. $36,300ABC Farm is preparing a collection budget for the year. Sales are expected to be P100,000 in January; P200,000 in February; and P300,000 in March. Approximately 60% of the sale is collected during the month of sale and the other 40% is collected in the following month. What is the beginning accounts receivable balance of March? P 80,000 P120,000 P180,000 P200,000 Group of answer choices 1 2 3 4
