Helping tags: Accounting, Cost accounting...WILL UPVOTE, just pls help me answer what is needed at the end of the picture and show complete solutions. Thank you! Case 2:Strange Things is an independently owned major appliance and electronics discountchain with seven stores located in a Midwest metropolitan area. Rapid expansion hascreated the need for careful planning of cash requirements to ensure that the chain isable to replenish stock adequately and meet payment schedules to creditors. SteveHarrington, founder of the chain, has established a banking relationship that provides a$200,000 line of credit to Strange Things. The bank requires that a minimum balance of$8,200 be kept in the chain's checking account at the end of each month. When thebalance goes below $8,200, the bank automatically extends the line of credit in multiplesof $1,000 so that the checking account balance is at least $8,200 at month-end. StrangeThings attempts to borrow as little as possible and repays the loans quickly in multiples.of $1,000 plus 2 percent monthly interest on the entire loan balance. Interest paymentsand any principal payments are paid at the end of the month following the loan. The chaincurrently has no outstanding loans.The following cash receipts and disbursements data apply to the fourth quarter of thecurrent calendar year:wwwStrategic Cost Management (STRACO)1954Estimated beginning cash balanceEstimated cash sales:OctoberNovemberDecemberSales on account:$ 8,800$ 14,00029,00044,000$130,000July (actual)August (actual)September (actual)104,000128,000October (estimated)135,000142,000November (estimated)December (estimated)188,000Projected cash collection of sales on account is estimated to be 70 percent in the monthfollowing the sale, 20 percent in the second month following the sale, and 6 percent inthe third month following the sale. The 4 percent beyond the third month following thesale is determined to be uncollectible. In addition, the chain is scheduled to receive$13,000 cash on a note receivable in October.All inventory purchases are made on account as the chain has excellent credit with allvendors because of a strong payment history. The following information regardinginventory purchases is available:Inventory PurchasesSeptember (actual)$120,000October (estimated)112,000November (estimated)128,000December (estimated)95,000Cash disbursements for inventory are made in the month following purchase using anaverage cash discount of 3 percent for timely payment. Monthly cash disbursements foroperating expenses during October, November, and December are estimated to be$38,000, $41,000, and $46,000, respectively.Required:Prepare Strange Things cash budget for the months of October, November, andDecember showing all receipts, disbursements, and credit line activity, where applicable.

Cash budget is one of the important budget that is being prepared in business and it shows expected…

Answered: Prepare Strange Things cash budget for…

Prepare Strange Things cash budget for the months of October, November, and December showing all receipts, disbursements, and credit line activity, where applicable.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 39P

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