Gusto Enterprises had a tough month in May, but June's sales and cash activity are looking strong. Gusto had to borrow $4,000 in May in order to maintain the company's required minimum balance of $5,000. The loan carries an annual interest rate of 6%, with monthly interest payments required. Loan withdrawals, in $1,000 increments, are assumed to be taken out on the first of the month. Loan payments, also in $1,000 increments, reduce the principal on the last day of the month. The June 1 cash balance is $5,780. With budgeted cash receipts of $105,600 and cash disbursements of $103,400 in June, how much of the prior month's loan would Gusto be able to pay off in June, if any? What is Gusto's projected ending cash balance in June? Loan paid off Projected ending cash balance $ $
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- Blossom Enterprises had a tough month in May, but June's sales and cash activity are looking strong. Blossom had to borrow $4,000 in May in order to maintain the company's required minimum balance of $5,000. The loan carries an annual interest rate of 6%, with monthly interest payments required. Loan withdrawals, in $1,000 increments, are assumed to be taken out on the first of the month. Loan payments, also in $1,000 increments, reduce the principal on the last day of the month. The June 1 cash balance is $5,590. With budgeted cash receipts of $103,200 and cash disbursements of $101,100 in June, how much of the prior month's loan would Blossom be able to pay off in June, if any? What is Blossom's projected ending cash balance in June? Loan paid off Projected ending cash balanceThe George Company has a policy of maintaining an end-of-month cash balance of at least $30,000.In months where a shortfall is expected, the company can draw in $1,000 increments on a line ofcredit it has with a local bank, at an interest rate of 12% per annum. All borrowings are assumed forbudgeting purposes to occur at the beginning of the month, while all loan repayments (in $1,000increments of principal) are assumed to occur at the end of the month. Interest is paid at the end ofeach month. For April, an end-of-month cash balance (prior to any financing and interest expense)of $18,000 is budgeted; for May, an excess of cash collected over cash payments (prior to any interest payments and loan repayments) of $22,000 is anticipated. What is the interest payment estimatedfor April (there is no bank loan outstanding at the end of March)? What is the total financing effect(cash interest plus loan transaction) for May?Bramble Enterprises had a tough month in May, but June's sales and cash activity are looking strong. Bramble had to borrow $3,000 in May in order to maintain the company's required minimum balance of $5,000. The loan carries an annual interest rate of 6%, with monthly interest payments required. Loan withdrawals, in $1,000 increments, are assumed to be taken out on the first of the month. Loan payments, also in $1,000 increments, reduce the principal on the last day of the month. The June 1 cash balance is $5,780. With budgeted cash receipts of $105,000 and cash disbursements of $102,800 in June, how much of the prior month's loan would Bramble be able to pay off in June, if any? What is Bramble's projected ending cash balance in June? Loan paid off $ 1000 Projected ending cash balance $ 6980
- The Balance Sheet of Lopez Agri-ventures, Inc. at December 31 is shown below. The company has received a large order and anticipates the need to go to the bank to increase its borrowings. As a result, it has to forecast its cash requirement to January, February and March. Typically, the company collects 20 percent of its sales in the month of sale, 70 percent in the subsequent month, and 10 percent in the second month after the sale. All sales are credit sales. (000s) Cash Accounts Payable 50 Notes Payable 530 Accrued Expenses 545 360 400 Accounts Receivable 212 Inventories Current Liabilities 972 Current Assets 1125 Long-term Liabilities Total Liabilities 450 1422 Non-current Assets 1836 Common Stocks 100 Retained Earnings Total Liabilities & Shareholder's Equity 1439 2961 Total Assets 2961 Purchase of raw materials are made in the month prior to the sale and amount to 60 percent of sales in the subsequent month. Payments for these purchases occur in the month after the purchase.…ABC Company is considering to establish a line of credit with a local bank to make up for the cash deficit for the next three months. The company expects a 60% chance for a $287.945 deficit and a 40% chance for no deficit at all. The line of credit charges 0.56% of interest rate per month on the amount borrowed plus a commitment fee of $2,500 for a quarter. It also requires a 7% compensation balance for outstanding loans. The company can reinvest any excess cash at an annual rate of 8%. What will the expected cost of establishing a line of credit be? Round your answer to the nearest dollar. (Hint: Refer to a numerical example in short-term financing choices.) O $5,617 $5,602 O $5,612 O $5.608 O $5,621ABC Company is considering to establish a line of credit with a local bank to make up for the cash deficit for the next three months. The company expects a 60% chance for a $273,446 deficit and a 40% chance for no deficit at all. The line of credit charges 0.52% of interest rate per month on the amount borrowed plus a commitment fee of $2,500 for a quarter. It also requires a 9% compensation balance for outstanding loans. The company can reinvest any excess cash at an annual rate of 8%. What will the expected cost of establishing a line of credit be? Round your answer to the nearest dollar. (Hint: Refer to a numerical example in short-term financing choices.) Group of answer choices $5,313 $5,321 $5,304 $5,309 $5,317
- Company is considering to establish a line of credit with a local bank to make up for the cash deficit for the next three months. The company expects a 60% chance for a $240,938 deficit and a 40% chance for no deficit at all. The line of credit charges 0.59% of interest rate per month on the amount borrowed plus a commitment fee of $2,500 for a quarter. It also requires a 7% compensation balance for outstanding loans. The company can reinvest any excess cash at an annual rate of 8%. What will the expected cost of establishing a line of credit be? Round your answer to the nearest dollar. (Hint: Refer to a numerical example in short-term financing choices.) Group of answer choices: $5,255 $5,240 $5,251 $5,260 $5,246Holiday Tree Farm has a cash balance of $34 and a short-term loan balance of $180 at the beginning of Qt. The net cash inflow for the first quarter is $36 and for the second quarter there is a net cash outflow of $48. All cash shortfalls are funded with short-term debt. The firm pays 2 percent of its prior quarter's ending loan balance as interest each quarter. The minimum cash balance is $20. What is the short-term loan balance at the end of Q2? Multiple Choice $184.3 $179.2 $138.6 $128.4 $1931Baker Industries has a 45 day accounts receivable period. The estimated quarterly sales for this year, starting with the first quarter, are $1,200, $1,400, $1,900 and $3,200, respectively. How much does the firm expect to collect in the third quarter? Assume that a year has 360 days. A)$1,300 B)$1,650 C)$1,400
- Jane MacDonald, Carroll Financial Analyst, prepared the following sales and cash disbursement estimates for the February-June period of this year. Month Sales Cash Disbursements February 500 400 March 600 300 April 400 600 May 200 500 June 200 200 MacDonald indicates that 30% of sales have been, historically, in cash. 70% of credit sales are collected one month after the sale, and the remaining 30% are collected two months after the sale. The company wants to keep a minimum final balance in its $ 25 cash account. Balances in excess of this amount will be invested in short-term government securities (marketable securities), while any deficits will be financed through short-term bank borrowing (payable securities). The cash balance initially on April 1 is $ 115. Prepare cash budgets for April, May, and June. How much, if any, of the maximum funding would Carroll require to meet its obligations within this three-month period?…A firm collects 25% of its credit sale in the month of sale and the remainder in the following month. The credit sale for the month of June is GHC 150,000. It expert to pay bills of GHC 22,000 in July. The depreciation for the month is GHC 1000. If the company maintains an end month cash balance of GHC 100,000, what is the external finance required?Philip Spencer of the Spencer Corporation wants you to forecast the firm's financing needs over the fourth quarter (October through December). He has made the following observations relative to planned cash receipts and disbursements: Interest on a $75,000 bank note (principal due next March) at an 8 percent annual rate is payable in December for the three-month period just ended. The firm follows a policy of paying no cash dividends. Actual historical and future predicted sales are as follows: Historical Sales Predicted Sales August $150,000 October $200,000 September $175,000 November $220,000 December $180,000 January $200,000 The firm has a monthly rental expense of $5,000. Wages and salaries for the coming months are estimated at $25,000 per month. Of the firm's sales, 25 percent is collected in the month of the sale, 35 percent one month after the sale, and the remaining 40 percent two months after the sale. Merchandise is…