All Related Questions of Cash Budget

Q: Wildcat, Inc., has estimated sales (in millions) for

Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Sales for the first quarter of the year after this one are projected at $120 million. Accounts receivable at th...

Q: Rework Problem 16-10 using a spreadsheet model. After completing

Rework Problem 16-10 using a spreadsheet model. After completing Parts a through d, respond to the following: If Bowers’ customers began to pay late, collections would slow down, thu...

Q: Dan Barnes, financial manager of Ski Equipment Inc. (SKI

Dan Barnes, financial manager of Ski Equipment Inc. (SKI), is excited, but apprehensive. The company’s founder recently sold his 51% controlling block of stock to Kent Koren, who is...

Q: Helen Bowers, owner of Helen’s Fashion Designs, is planning to

Helen Bowers, owner of Helen’s 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 2009...

Q: What is a cash budget, and how can this statement be

What is a cash budget, and how can this statement be used to help reduce the amount of cash that a firm needs to carry? What are the advantages and disadvantages of daily over monthly cash budgets, an...

Q: Explain how the cash budget and the capital budget relate to pro

Explain how the cash budget and the capital budget relate to pro forma financial statements.

Q: Briefly explain how a cash budget works and what it accomplishes with

Briefly explain how a cash budget works and what it accomplishes with its last few lines of data.

Q: Cooper Apple Growers (CAG) is a major food cooperative.

Cooper Apple Growers (CAG) is a major food cooperative. Suppose CAG begins 2011 with cash of $8 million. CAG estimates cash receipts during 2011 will total $103 million. Planned payments will total $8...

Q: Scrumptious Crumpets Bakery is budgeting cash for 2012. The cash balance

Scrumptious Crumpets Bakery is budgeting cash for 2012. The cash balance at December 31, 2011, was $14,000. Scrumptious Crumpets Bakery budgets 2012 cash receipts at $81,000. Estimated cash payments i...

Q: Gale Communications, Inc., is preparing its cash budget for 2012

Gale Communications, Inc., is preparing its cash budget for 2012. Gale ended 2011 with cash of $85 million, and managers need to keep a cash balance of at least $78 million for operations. Collections...

Q: Nathan Farmer, chief financial officer of Bosworth Wireless, is responsible

Nathan Farmer, chief financial officer of Bosworth Wireless, is responsible for the company’s budgeting process. Farmer’s staff is preparing the Bosworth cash budge...

Q: David Doyle, chief financial officer of Madison Wireless, is responsible

David Doyle, chief financial officer of Madison Wireless, is responsible for the company’s budgeting process. Doyle’s staff is preparing the Madison cash budget for...

Q: Dave Dern, the chief financial officer, is responsible for The

Dave Dern, the chief financial officer, is responsible for The Grand Design’s cash budget for 2013. The budget will help Dem determine the amount of long-term borrowing needed to end the year with a c...

Q: Donn Communications, Inc., is preparing its cash budget for 2012

Donn Communications, Inc., is preparing its cash budget for 2012. Donn ended 2011 with cash of $88 million, and managers need to keep a cash balance of at least $79 million for operations. Collections...

Q: How is a cash budget used to help manage current assets?

How is a cash budget used to help manage current assets?

Q: Lansing Auto Parts, Inc., has projected sales of $25

Lansing Auto Parts, Inc., has projected sales of $25,000 in October, $35,000 in November, and $30,000 in December. Of the company's sales, 20 percent are paid for by cash and 80 percent are sold on cr...

Q: Harry's Carryout Stores has eight locations. The firm wishes to expand

Harry's Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mr. Wilson, the banker, will finance construction if the firm can present an...

Q: Archer Electronics Company's actual sales and purchases for April and May are

Archer Electronics Company's actual sales and purchases for April and May are shown here along with forecasted sales and purchases for June through September. The company makes 10 percent of its sale...

Q: Bombs Away Video Games Corporation has forecasted the following monthly sales:

Bombs Away Video Games Corporation has forecasted the following monthly sales: Bombs Away Video Games sells the popular Strafe and Capture video game. Its sells for $5 per unit and costs $2 per unit...

Q: Esquire Products, Inc., expects the following monthly sales:

Esquire Products, Inc., expects the following monthly sales: Cash sales are 40 percent in a given month, with the remainder going into accounts receivable. All receivables are collected in the month...

Q: Use the following information to prepare the July cash budget for Acco

Use the following information to prepare the July cash budget for Acco Co. It should show expected cash receipts and cash disbursements for the month and the cash balance expected on July 31. a. Begin...

Q: During the last week of March, Sony Stereo’s owner approaches the

During the last week of March, Sony Stereo’s owner approaches the bank for a $80,000 loan to be made on April 1 and repaid on June 30 with annual interest of 12%, for an interest cos...

Q: Connick Company sells its product for $22 per unit. Its

Connick Company sells its product for $22 per unit. Its actual and projected sales follow. All sales are on credit. Recent experience shows that 40% of credit sales is collected in the month of the...

Q: Castor, Inc. is preparing its master budget for the quarter

Castor, Inc. is preparing its master budget for the quarter ended June 30. Budgeted sales and cash payments for merchandise for the next three months follow: Sales are 50% cash and 50% on credit. Al...

Q: Kelsey is preparing its master budget for the quarter ended September 30

Kelsey is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for merchandise for the next three months follow: Sales are 20% cash and 80% on credit. All...

Q: The following information is available for Zetrov Company: a.

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 indica...

Q: Use the following information to prepare a cash budget for the month

Use the following information to prepare a cash budget for the month ended on March 31 for Gado Merchandising Company. The budget should show expected cash receipts and cash disbursements for the mont...

Q: Messers Company is preparing a cash budget for February. The company

Messers Company is preparing a cash budget for February. The company has $20,000 cash at the beginning of February and anticipates $75,000 in cash receipts and $100,250 in cash disbursements during Fe...

Q: Karim Corp. requires a minimum $8,000 cash balance

Karim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at...

Q: Foyert Corp. requires a minimum $30,000 cash balance

Foyert Corp. requires a minimum $30,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans a...

Q: During the last week of August, Oneida Company’s owner approaches the

During the last week of August, Oneida Company’s owner approaches the bank for a $100,000 loan to be made on September 2 and repaid on November 30 with annual interest of 12%, for an...

Q: Aztec Company sells its product for $180 per unit. Its

Aztec Company sells its product for $180 per unit. Its actual and projected sales follow. All sales are on credit. Recent experience shows that 20% of credit sales is collected in the month of the s...

Q: Table 29.14 lists data from the budget of Ritewell Publishers

Table 29.14 lists data from the budget of Ritewell Publishers. Half the company’s sales are for cash on the nail; the other half are paid for with a one-month delay. The...

Q: Brighton, Inc., manufactures kitchen tiles. The company recently expanded

Brighton, Inc., manufactures kitchen tiles. The company recently expanded, and the controller believes that it will need to borrow cash to continue operations. It began negotiating for a one-month ban...

Q: The board of directors of the Cortez Beach Yacht Club (CBYC

The board of directors of the Cortez Beach Yacht Club (CBYC) is developing plans to acquire more equipment for lessons and rentals and to expand club facilities. The board plans to purchase about $50,...

Q: Ashland Corporation, a merchandising fi rm, is preparing its cash

Ashland Corporation, a merchandising fi rm, is preparing its cash budget for October. The following information is available concerning its inventories: Inventories at beginning of October . . . . ....

Q: Duluth Company is preparing its cash budget for December. The following

Duluth Company is preparing its cash budget for December. The following information is available concerning its accounts receivable: Estimated credit sales for December . . . . . . . . . . . . . . ....

Q: Nassau Products is preparing a cash budget for April. The following

Nassau Products is preparing a cash budget for April. The following information on accounts receivable collections is available from past collection experience: Percent of current month’s sales collec...

Q: The Disability Research Institute receives its funding mainly from government grants and

The Disability Research Institute receives its funding mainly from government grants and private contributions. In turn, it supports research and related projects carried out by universities and other...

Q: In September, TEE Company, a merchandising firm that sells one

In September, TEE Company, a merchandising firm that sells one product, assembled the following information and estimates to prepare a budget for October. Expected sales are 40,000 units at a price of...

Q: Will Benjamin has been working on Heston Paints’ cash budget for the

Will Benjamin has been working on Heston Paints’ cash budget for the coming year. Based on his projections for March, the beginning cash balance will be $45,700, cash collections will be $650,000, and...

Q: Inc. prepared the following cash budget for the fourth quarter.

Inc. prepared the following cash budget for the fourth quarter. Required: Fill in the missing amounts, assuming that Topper desires to maintain a $15,000 minimum monthly cash balance. Any required bo...

Q: John Wills, Bates & Hill Fabricators’ budget director, has received

John Wills, Bates & Hill Fabricators’ budget director, has received budget information from several managers (see Exercises 5-8, 9, 11, 15, 17, 19, 20, 23, and 25) and is preparing the company’s cash...

Q: Sophisticates, Inc., a distributor of jewelry throughout California, is

Sophisticates, Inc., a distributor of jewelry throughout California, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the...

Q: Draw a flowchart similar to the one in Exhibit 9–1

Draw a flowchart similar to the one in Exhibit 9–1 for a service station. The service station provides automotive maintenance services in addition to selling gasoline and related pro...

Q: Dorothy Koehl recently leased space in the Southside Mall and opened a

Dorothy Koehl recently leased space in the Southside Mall and opened a new business, Koehl’s Doll Shop. Business has been good, but Koehl frequently runs out of cash. This has necess...

Q: Karen Johnson, CFO for Raucous Roasters (RR), a specialty

Karen Johnson, CFO for Raucous Roasters (RR), a specialty coffee manufacturer, is rethinking her company’s working capital policy in light of a recent scare she faced when RRâ&...

Q: What is a cash budget, and how is this statement used

What is a cash budget, and how is this statement used by a business? How is the cash budget affected by the CCC? By credit policy?

Q: Prime Time Sportswear is a custom imprinter that began operations six months

Prime Time Sportswear is a custom imprinter that began operations six months ago. Sales have exceeded management’s most optimistic projections. Sales are made on account and collecte...

Q: Refer to the Prime Time Sportswear data presented in Problem 14.

Refer to the Prime Time Sportswear data presented in Problem 14.13. Problem 14.13: Prime Time Sportswear is a custom imprinter that began operations six months ago. Sales have exceeded management&ac...

Q: At the beginning of the school year, Katherine Malloy decided to

At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31...

Q: You have recently been hired by Piepkorn Manufacturing to work in the

You have recently been hired by Piepkorn Manufacturing to work in the newly established treasury department. Piepkorn Manufacturing is a small company that produces cardboard boxes in a variety of siz...

Q: The results of operations for the Preston Manufacturing Company for the fourth

The results of operations for the Preston Manufacturing Company for the fourth quarter of 2017 were as follows: Note: Preston Manufacturing uses the variable costing method. Thus, only variable produ...

Q: In the fourth quarter of 2017, Casey Wholesalers had the following

In the fourth quarter of 2017, Casey Wholesalers had the following net income: Sales $650,000 Less cost of sales 300,000 Gross margin 350,000 Selling and administration 250,000 Income before taxes 100...

Q: The results of operations for the Garret Bug Spray Manufacturing Company for

The results of operations for the Garret Bug Spray Manufacturing Company for the fourth quarter of 2017 were as follows (in thousands): Note: Garret uses the variable costing method. Thus, only varia...

Q: Techlabs operates a computer training center. The following data relate to

Techlabs operates a computer training center. The following data relate to the preparation of a master budget for January 2018. 1. At the end of 2017, the company’s general ledger i...

Q: The Schrödinger Science Store operates a retail store in a local shopping

The Schrödinger Science Store operates a retail store in a local shopping mall. The results of operations for the fourth quarter of 2017 are as follows: Sales………………………………………………………………………………. $350,000...

Q: The World Restaurant is situated in a local shopping center and serves

The World Restaurant is situated in a local shopping center and serves food of many different cultures. It also caters private functions for companies. The results of operations for the fourth quarter...

Q: In the fourth quarter of 2017, Eurofit Cycling, a bike

In the fourth quarter of 2017, Eurofit Cycling, a bike shop, had the following net income: Sales…………â€&brvba...

Q: Which of the following statements is correct regarding the components of the

Which of the following statements is correct regarding the components of the master budget? a. The cash budget is used to create the capital budget. b. Operating budgets are used to create cash budget...

Q: Which of the following statements is correct regarding the drivers of operating

Which of the following statements is correct regarding the drivers of operating and financial budgets? a. The sales budget will drive the cost of goods sold budget. b. The cost of goods sold budget wi...

Q: Mary Jacobs, the controller of the Jenks Company is working on

Mary Jacobs, the controller of the Jenks Company is working on Jenks’ cash budget for year 2. She has information on each of the following items: I. Wages due to workers accrued as of December 31, yea...

Q: Rigley Company expects to have a cash balance of $46,

Rigley Company expects to have a cash balance of $46,000 on January 1, 2017. These are the relevant monthly budget data for the first two months of 2017. 1. Collections from customers: January $71,000...

Q: You are provided with the following information taken from Moynahan Inc.

You are provided with the following information taken from Moynahan Inc.’s March 31, 2017, balance sheet. Cash $ 11,000 Accounts receivable 20,000 Inventory...

Q: A Bastille Corporation prepares monthly cash budgets. Here are relevant data

A Bastille Corporation prepares monthly cash budgets. Here are relevant data from operating budgets for 2017. All sales and purchases are on account. Budgeted collections and disbursement data are gi...

Q: The following information is available for Bonkers Company for the month of

The following information is available for Bonkers Company for the month of January: expected cash receipts $59,000, expected cash disbursements $67,000, and cash balance on January 1, $12,000. Manage...

Q: Ryan Richards, controller for Grange Retailers, has assembled the following

Ryan Richards, controller for Grange Retailers, has assembled the following data to assist in the preparation of a cash budget for the third quarter of 2014: a. Sales: May (actual) â€&brvb...

Q: The cash budget serves which of the following purposes?

The cash budget serves which of the following purposes? a. Documents the need for liberal inventory policies. b. Reveals the amount of depreciation expense. c. Reveals the amount lost due to uncollec...

Q: Dr. Roger Jones is a successful dentist but is experiencing recurring

Dr. Roger Jones is a successful dentist but is experiencing recurring financial difficulties. For example, Jones owns his office building, which he leased to the professional corporation that housed h...

Q: La Famiglia Pizzeria provided the following information for the month of October

La Famiglia Pizzeria provided the following information for the month of October: a. Sales are budgeted to be $157,000. About 85% of sales are cash; the remainder are on account. b. La Famiglia expect...

Q: The owner of a building supply company has requested a cash budget

The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following: a. Cash balance on June 1 is $736. b. Actual sales for...

Q: The following cash budget is for the third quarter of 2011.

The following cash budget is for the third quarter of 2011. Solve for the missing numbers on the cash budget, assuming that the accountant has requested a minimum cash balance of $7,000 at the start o...

Q: Compute the required answer for each of the following independent situations.

Compute the required answer for each of the following independent situations. a. For next year, Penny Suits projects $8,000,000 of sales and total fixed manufacturing costs of $2,000,000. Variable man...

Q: Davide’s Arrangements purchases, wholesales, and retails fresh flowers. Company

Davide’s Arrangements purchases, wholesales, and retails fresh flowers. Company estimates reveal the following for the first three months of the company’s 2011 fisc...

Q: Corner Brook Furniture Co. makes bookstands and expects sales and collections

Corner Brook Furniture Co. makes bookstands and expects sales and collections for the first three months of 2011 to be as follows: The December 31, 2010, balance sheet revealed the following selected...

Q: Collegiate Management Education (CME) Inc. is a nonprofit organization

Collegiate Management Education (CME) Inc. is a nonprofit organization that sponsors a wide variety of management seminars throughout the Southwest. In addition, it is heavily involved in research int...

Q: The cash budget and the budgeted statement of cash flows both provide

The cash budget and the budgeted statement of cash flows both provide information about cash. What information about cash is common to these two sources, and what information is unique to the two sour...

Q: “The principal purpose of the cash budget is to see how

“The principal purpose of the cash budget is to see how much cash the company will have in the bank at the end of the year.” Do you agree? Explain.

Q: You have been asked to prepare a December cash budget for Ashton

You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company’s operations:...

Q: Minden Company is a wholesale distributor of premium European chocolates. The

Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash ...................

Q: The president of the retailer Prime Products has just approached the company’s

The president of the retailer Prime Products has just approached the company’s bank with a request for a $30,000, 90-day loan. The purpose of the loan is to assist the company in acq...

Q: Garden Sales, Inc., sells garden supplies. Management is planning

Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care...

Q: The following data relate to the operations of Shilow Company, a

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash .................................................... $8,0...

Q: Garden Depot is a retailer that is preparing its budget for the

Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: The company’s beginn...

Q: Roller, Ltd., of Melbourne, Australia, is the exclusive

Roller, Ltd., of Melbourne, Australia, is the exclusive distributor in Australia and the South Pacific of a popular brand of in-line skates manufactured in Mexico. The company is in the process of put...

Q: Refer to the information in Problem 6-40. Assume the

Refer to the information in Problem 6-40. Assume the following: Animal Gear (AG) does not make any sales on credit. AG sells only to the public and accepts cash and credit cards; 90% of its sales are...

Q: Refer to the information in Problem 6-42. Budgeted balances

Refer to the information in Problem 6-42. Budgeted balances at January 31, 2018 are as follows: Cash…………â€&br...

Q: Refer to the information in Problem 6-44. All purchases

Refer to the information in Problem 6-44. All purchases made in a given month are paid for in the following month, and direct material purchases make up all of the accounts payable balance and are ref...

Q: Tyva makes a very popular undyed cloth sandal in one style,

Tyva makes a very popular undyed cloth sandal in one style, but in Regular and Deluxe. The Regular sandals have cloth soles and the Deluxe sandals have cloth-covered wooden soles. Tyva is preparing it...

Q: HealthMart is a retail store selling home oxygen equipment. HealthMart also

HealthMart is a retail store selling home oxygen equipment. HealthMart also services home oxygen equipment, for which the company bills customers monthly. HealthMart has budgeted for increases in serv...

Q: What is meant by a cash budget? Describe how a cash

What is meant by a cash budget? Describe how a cash budget is prepared.

Q: A. Prepare PDC’s sales schedule, purchases schedule, and the

A. Prepare PDC’s sales schedule, purchases schedule, and the wages schedule for August 2017. B. Prepare a cash budget for August 2017 for the PDC Company and describe how the forecast affects the end-...

Q: Artero Corporation is a traditional toy products retailer that recently also started

Artero Corporation is a traditional toy products retailer that recently also started an Internet-based subsidiary that sells toys online. A markup is added on goods the company purchases from manufac...

Q: a. Expand the cash budget you created in Problem 12.

a. Expand the cash budget you created in Problem 12.4 to include a row for expected cash outflows equal to 77% of the current month’s sales. b. Also add a row to calculate the amount of cash that nee...

Q: The accountant for Jean’s Dress Shop prepared the following cash budget.

The accountant for Jean’s Dress Shop prepared the following cash budget. Jean’s desires to maintain a cash cushion of $10,000 at the end of each month. Funds are as...

Q: The primary reason for preparing a cash budget is to determine the

The primary reason for preparing a cash budget is to determine the amount of cash to include on the budgeted balance sheet. Do you agree or disagree with this statement? Explain.

Q: The controller of Shoe Mart Inc. asks you to prepare a

The controller of Shoe Mart Inc. asks 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 20% o...

Q: You are provided with the following information taken from Langerhan Inc.

You are provided with the following information taken from Langerhan Inc.’s March 31, 2014, balance sheet. Cash ………â...

Q: Castle Corporation prepares monthly cash budgets. Here are relevant data from

Castle Corporation prepares monthly cash budgets. Here are relevant data from operating budgets for 2014. All sales and purchases are on account. Budgeted collections and disbursement data are given...

Q: You are provided with the following information taken from Items Inc.

You are provided with the following information taken from Items Inc.’s May 31, 2014, balance sheet. Cash ………â€...

Q: Noble Corporation prepares monthly cash budgets. Relevant data from operating budgets

Noble Corporation prepares monthly cash budgets. Relevant data from operating budgets for 2014 are shown All sales and purchases are on account. Budgeted collections and disbursement data are given...

Q: The following information is available for Conger Company for the month of

The following information is available for Conger Company for the month of January: expected cash receipts $59,000; expected cash disbursements $67,000; and cash balance on January 1, $12,000. Managem...

Q: Enright Company expects to have a cash balance of $46,

Enright Company expects to have a cash balance of $46,000 on January 1, 2014. These are the relevant monthly budget data for the first two months of 2014. 1. Collections from customers: January $71,00...

Q: John Watson, chief financial officer of Jasper Wireless, is responsible

John Watson, chief financial officer of Jasper Wireless, is responsible for the companys budgeting process. Watsons staff is preparing the Jasper cash budget for 2011. A key input to the budgeting pro...

Q: Don Beecher, chief financial officer of Carvel Wireless, is responsible

Don Beecher, chief financial officer of Carvel Wireless, is responsible for the companys budgeting process. Beechers staff is preparing the Carvel cash budget for 2011. A key input to the budgeting pr...

Q: The Little French Bakery is budgeting cash for 2011. The cash

The Little French Bakery is budgeting cash for 2011. The cash balance at December 31, 2010, was $6,000. The Little French Bakery budgets 2011 cash receipts at $83,000. Estimated cash payments include...

Q: Dan Davis, the chief financial officer, is responsible for The

Dan Davis, the chief financial officer, is responsible for The Furniture Marts cash budget for 2010. The budget will help Davis determine the amount of long-term borrowing needed to end the year with...

Q: Crescent Artichoke Growers (CAG) is a major food cooperative.

Crescent Artichoke Growers (CAG) is a major food cooperative. Suppose CAG begins 2010 with cash of $11 million. CAG estimates cash receipts during 2010 will total $104 million. Planned payments will t...

Q: Refer to the data for Minden Company. The company is considering

Refer to the data for Minden Company. The company is considering making the following changes to the assumptions underlying its master budget: 1.Sales are budgeted for $220,000 for May. 2.Each month’s...

Q: Refer to the data for Garden Sales, Inc., in Problem

Refer to the data for Garden Sales, Inc., in Problem 8–24. The company’s president is interested in knowing how reducing inventory levels and collecting accounts re...

Q: Wolfpack Company is a merchandising company that is preparing a budget for

Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information: Wolfpack Company Balance Sheet June 30 Assets Cash...............

Q: Wildcat, Inc., has estimated sales (in millions) for

Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows: Sales for the first quarter of the year after this one are projected at $120 million. Accounts receivable at t...

Q: Foyert Corp. requires a minimum $30,000 cash balance

Foyert Corp. requires a minimum $30,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans a...

Q: Use the following information to prepare the September cash budget for PTO

Use the following information to prepare the September cash budget for PTO Manufacturing Co. The following information relates to expected cash receipts and cash disbursements for the month ended Sept...

Q: Mike’s Motors Corp. manufactures motors for dirt bikes. The company

Mike’s Motors Corp. manufactures motors for dirt bikes. The company requires a minimum $30,000 cash balance at each month-end. If necessary, the company takes a loan to meet this req...

Q: Use the following information to prepare the July cash budget for Acco

Use the following information to prepare the July cash budget for Acco Co. It should show expected cash receipts and cash disbursements for the month and the cash balance expected on July 31. a. Begin...

Q: Castor, Inc., is preparing its master budget for the quarter

Castor, Inc., is preparing its master budget for the quarter ended June 30. Budgeted sales and cash payments for merchandise for the next three months follow: Sales are 50% cash and 50% on credit. A...

Q: Kelsey is preparing its master budget for the quarter ended September 30

Kelsey is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for merchandise for the next three months follow: Sales are 20% cash and 80% on credit. All...

Q: Karim Corp. requires a minimum $8,000 cash balance

Karim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at...

Q: During the last week of August, Oneida Company’s owner approaches the

During the last week of August, Oneida Company’s owner approaches the bank for a $100,000 loan to be made on September 2 and repaid on November 30 with annual interest of 12%, for an...

Q: Aztec Company sells its product for $180 per unit. Its

Aztec Company sells its product for $180 per unit. Its actual and budgeted sales follow. All sales are on credit. Recent experience shows that 20% of credit sales is collected in the month of the sa...

Q: Built-Tight is preparing its master budget for the quarter ended

Built-Tight is preparing its master budget for the quarter ended September 30, 2015. Budgeted sales and cash payments for product costs for the quarter follow: Sales are 20% cash and 80% on credit....

Q: A1 Manufacturing is preparing its master budget for the quarter ended September

A1 Manufacturing is preparing its master budget for the quarter ended September 30, 2015. Budgeted sales and cash payments for product costs for the quarter follow. Sales are 20% cash and 80% on cre...

Q: During the last week of March, Sony Stereo’s owner approaches the

During the last week of March, Sony Stereo’s owner approaches the bank for an $80,000 loan to be made on April 1 and repaid on June 30 with annual interest of 12%, for an interest co...

Q: Connick Company sells its product for $22 per unit. Its

Connick Company sells its product for $22 per unit. Its actual and budgeted sales follow. All sales are on credit. Recent experience shows that 40% of credit sales is collected in the month of the s...

Q: Messers Company is preparing a cash budget for February. The company

Messers Company is preparing a cash budget for February. The company has $20,000 cash at the beginning of February and anticipates $75,000 in cash receipts and $100,250 in cash disbursements during Fe...

Q: Use the following information to prepare a cash budget for the month

Use the following information to prepare a cash budget for the month ended on March 31 for Gado Company. The budget should show expected cash receipts and cash disbursements for the month of March and...

Q: Rigley Company expects to have a cash balance of $46,

Rigley Company expects to have a cash balance of $46,000 on January 1, 2017. These are the relevant monthly budget data for the first two months of 2017. 1. Collections from customers: January $71,000...

Q: The following information is available for Bonkers Company for the month of

The following information is available for Bonkers Company for the month of January: expected cash receipts $59,000, expected cash disbursements $67,000, and cash balance on January 1, $12,000. Manage...

Q: Danner Company expects to have a cash balance of $45,

Danner Company expects to have a cash balance of $45,000 on January 1, 2014. Relevant monthly budget data for the first 2 months of 2014 are as follows. Collections from customers: January $85,000, Fe...

Q: The controller of Trenshaw Company wants to improve the company’s control system

The controller of Trenshaw Company wants to improve the company’s control system by preparing a month-by-month cash budget. The following information is for the month ending July 31, 2014. June 30, 2...

Q: Krause Industries’ balance sheet at December 31, 2013, is presented

Krause Industries’ balance sheet at December 31, 2013, is presented below. Additional information accumulated for the budgeting process is as follows. Budgeted data for the year 20...

Q: Colter Company prepares monthly cash budgets. Relevant data from operating budgets

Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2014 are: All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first m...

Q: Derby Company prepares monthly cash budgets. Relevant data from operating budgets

Derby Company prepares monthly cash budgets. Relevant data from operating budgets for 2014 are: All sales are on account. Collections are expected to be 60% in the month of sale, 25% in the first mo...

Q: Use this list of terms to complete the sentences that follow.

Use this list of terms to complete the sentences that follow. Long-range plans Participative budgeting Sales forecast Operating budgets...

Q: In order to better serve their rural patients, Drs. Joe

In order to better serve their rural patients, Drs. Joe and Rick Parcells (brothers) began giving safety seminars. Especially popular were their “emergency-preparedness” talks given to f...

Q: In order to better serve their rural patients, Drs. Joe

In order to better serve their rural patients, Drs. Joe and Rick Parcells (brothers) began giving safety seminars. Especially popular were their “emergency-preparedness” talks given to f...

Q: Aaron Corporation is projecting a cash balance of $30,000

Aaron Corporation is projecting a cash balance of $30,000 in its December 31, 2013, balance sheet. Aaron’s schedule of expected collections from customers for the first quarter of 2014 shows total col...

Q: Lager Dental Clinic is a medium-sized dental service specializing in

Lager Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the master budget for the first 2 quarters of 2014. All that remains in this...

Q: The Sharpe Corporation’s projected sales for the first 8 months of 2016

The Sharpe Corporation’s projected sales for the first 8 months of 2016 are shown in the corresponding table. Of Sharpe’s sales, 10 percent is for cash, another 60...

Q: A cash budget is usually thought of as a means of planning

A cash budget is usually thought of as a means of planning for future financing needs. Why would a cash budget also be important for a firm that has excess cash on hand?

Q: Oliver’s Bistro provided the following information for the month of October:

Oliver’s Bistro provided the following information for the month of October: a. Sales are budgeted to be $395,000. About 80% of sales is cash; the remainder is on account. b. Oliver’s Bistro expects t...

Q: Develop a personal cash budget for the next six months. Explain

Develop a personal cash budget for the next six months. Explain what you would do if there are budget shortfalls or excess cash amounts at the end of any month during the six-month period.

Q: The controller of Feinberg Company is gathering data to prepare

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...

Q: Wildcat, Inc., has estimated sales (in millions) for the next

Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:Sales for the first quarter of the year after this one are projected at $240 million. Accounts receivable at the...

Q: On December 1, 2015, the Basma Wholesale Company is attempting

On December 1, 2015, the Basma Wholesale Company is attempting to project cash receipts and disbursements through January 31, 2016. On January 31, 2016, a note will be payable in the amount of $120,00...

Q: Assume the following: Pet Transport (PT) does not make

Assume the following: Pet Transport (PT) does not make any sales on credit. PT sells only to the public, and accepts cash and credit cards. Of its sales, 90% are to customers using credit cards, for w...

Q: Yummi-Lik makes really big lollipops in two sizes, large

Yummi-Lik makes really big lollipops in two sizes, large and giant. Yummi-Lik sells these lollipops to convenience stores, at fairs, and to schools for fundraisers, and in bulk on the internet. Summer...

Q: TabComp Inc. is a retail distributor for MZB-33 computer

TabComp Inc. is a retail distributor for MZB-33 computer hardware and related software and support services. TabComp prepares annual sales forecasts of which the first six months for 2016 are presente...

Q: How does a cash budget help an entrepreneur?

How does a cash budget help an entrepreneur?

Q: Jubilee’s Bakery is budgeting cash for 2017. The cash balance at

Jubilee’s Bakery is budgeting cash for 2017. The cash balance at December 31, 2016, was $6,000. Jubilee’s Bakery budgets 2017 cash receipts at $81,000. Estimated cash payments include $44,000 for inve...

Q: Julia Beecher, chief financial officer of Keller Wireless, is responsible

Julia Beecher, chief financial officer of Keller Wireless, is responsible for the company’s budgeting process. Beecher’s staff is preparing the Kelle...

Q: Mark Farmer, chief financial officer of Carvel Wireless, is responsible

Mark Farmer, chief financial officer of Carvel Wireless, is responsible for the company’s budgeting process. Farmer’s staff is preparing the Carvel c...

Q: Megan Williams, the chief financial officer, is responsible for Dollar

Megan Williams, the chief financial officer, is responsible for Dollar Depot’s cash budget for 2017. The budget will help Williams determine if long-term borrowing is...

Q: Byer Communications, Inc., is preparing its cash budget for the

Byer Communications, Inc., is preparing its cash budget for the year ending December 31, 2017. Byer ended 2016 with cash of $65 million and managers need to keep a cash balance of at least $68 million...

Q: Ayers Communications, Inc., is preparing its cash budget for the

Ayers Communications, Inc., is preparing its cash budget for the year ending December 31, 2017. Ayers ended 2016 with cash of $62 million and managers need to keep a cash balance of at least $71 milli...

Q: Kent Market (KM) is a major food cooperative. Suppose

Kent Market (KM) is a major food cooperative. Suppose KM begins 2017 with cash of $5 million. KM estimates cash receipts during 2017 will total $103 million. Planned payments will total $93 million. T...

Q: Describe the cash budget and its three parts. How does a

Describe the cash budget and its three parts. How does a budget deficit differ from a budget surplus?

Q: The Gonzales family has prepared their annual cash budget for 2016.

The Gonzales family has prepared their annual cash budget for 2016. They have divided it into 12 monthly budgets. Although only 1 monthly budget balances, they have managed to balance the overall budg...

Q: Prepare a record of your income and expenses for the last 30

Prepare a record of your income and expenses for the last 30 days; then prepare a personal cash budget for the next three months. (Use the format in Worksheet 2.3, but fill out only three months and t...

Q: Brooke Stauffer recently graduated from college and moved to Atlanta to take

Brooke Stauffer recently graduated from college and moved to Atlanta to take a job as a market research analyst. She was pleased to be financially independent and was sure that, with her $45,000 salar...

Q: Sasha Parker is going to set up a new business in Bruges

Sasha Parker is going to set up a new business in Bruges on 1 January 20X1. She estimates that her first six months in business will be as follows: (i) She will put €150,000 into the firm on 1 January...

Q: Sasha Parker is going to set up a new business on 1

Sasha Parker is going to set up a new business on 1 January 20X1. She estimates that her first six months in business will be as follows: (i) She will put £150,000 into a bank account for the firm on...

Q: The financial manager of Hearty Cereals is in the process of preparing

The financial manager of Hearty Cereals is in the process of preparing a cash budget for the first quarter of 2015. The firm typically sells 1/3 of its monthly sales on cash terms and the rest on cred...

Q: Wildcat, Inc., has estimated sales (in millions) for the next

Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:Sales for the first quarter of the following year are projected at $180 million. Accounts receivable at the begin...

Q: You have recently been hired by Piepkorn Manufacturing to work

You have recently been hired by Piepkorn Manufacturing to work in the newly established treasury department. Piepkorn Manufacturing is a small company that produces cardboard boxes in a variety of siz...

Q: Wildcat, Inc., has estimated sales (in millions) for the next

Wildcat, Inc., has estimated sales (in millions) for the next four quarters as follows:Sales for the first quarter of the following year are projected at $180 million. Accounts receivable at the begin...

Q: You have recently been hired by Piepkorn Manufacturing to work

You have recently been hired by Piepkorn Manufacturing to work in the newly established treasury department. Piepkorn Manufacturing is a small company that produces cardboard boxes in a variety of siz...

Q: Danner Company expects to have a cash balance of $45,

Danner Company expects to have a cash balance of $45,000 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows. Collections from customers: January $85,000, Fe...

Q: Deitz Corporation is projecting a cash balance of $30,000

Deitz Corporation is projecting a cash balance of $30,000 in its December 31, 2019, balance sheet. Deitz’s schedule of expected collections from customers for the first quarter of 2020 shows total col...

Q: The controller of Trenshaw Company wants to improve the company’s control system

The controller of Trenshaw Company wants to improve the company’s control system by preparing a month-by-month cash budget. The following information is for the month ending July 31, 2020. June 30, 2...

Q: Pletcher Dental Clinic is a medium-sized dental service specializing in

Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the master budget for the first 2 quarters of 2020. All that remains in th...

Q: In order to better serve their rural patients, Drs. Joe

In order to better serve their rural patients, Drs. Joe and Rick Parcells (brothers) began giving safety seminars. Especially popular were their “emergency-preparednessâ€&...

Q: Colter Company prepares monthly cash budgets. Relevant data from operating budgets

Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2020 are as follows. All sales are on account. Collections are expected to be 50% in the month of sale, 30% in...

Q: Krause Industries’ balance sheet at December 31, 2019, is presented

Krause Industries’ balance sheet at December 31, 2019, is presented below. Budgeted data for the year 2020 include the following. To meet sales requirements and to have 2,500 uni...

Q: Bombs Away Video Games Corporation has forecasted the following monthly sales:

Bombs Away Video Games Corporation has forecasted the following monthly sales: Bombs Away Video Games sells the popular Strafe and Capture video game. It sells for $5 per unit and costs $2 per unit...

Q: Esquire Products Inc. expects the following monthly sales:

Esquire Products Inc. expects the following monthly sales: Cash sales are 40 percent in a given month, with the remainder going into accounts receivable. All receivables are collected in the month f...

Q: Graham Potato Company has projected sales of $6,000 in

Graham Potato Company has projected sales of $6,000 in September, $10,000 in October, $16,000 in November, and $12,000 in December. Of the company’s sales, 20 percent are paid for by cash and 80 perce...

Q: Harry’s Carryout Stores has eight locations. The firm wishes to expand

Harry’s Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mr. Wilson, the banker, will finance construction if the f...

Q: Archer Electronics Company’s actual sales and purchases for April and May are

Archer Electronics Company’s actual sales and purchases for April and May are shown here, along with forecast sales and purchases for June through September. The company makes 20 p...

Q: Prepare a cash budget for Atlas Products, Inc., for the

Prepare a cash budget for Atlas Products, Inc., for the first quarter of 2017, based on the following information: The budgeting section of the corporate finance department of Atlas Products has recei...

Q: Prepare a cash budget for Elmwood Manufacturing Company for the first three

Prepare a cash budget for Elmwood Manufacturing Company for the first three months of 2017 based on the following information: The company has found that approximately 40 percent of sales are collec...

Q: The Sharpe Corporation’s projected sales for the first eight months of 2017

The Sharpe Corporation’s projected sales for the first eight months of 2017 are as follows: Of Sharpe’s sales, 10 percent are for cash, another 60 percent are col...

Q: Harrison Printing has projected its sales for the first eight months of

Harrison Printing has projected its sales for the first eight months of 2017 as follows: Harrison collects 20 percent of its sales in the month of the sale, 50 percent in the month following the sal...

Q: In Finance for Life: Your Cash Budget and Personal Savings Ratio

In Finance for Life: Your Cash Budget and Personal Savings Ratio on page 102, we defined something called your personal savings ratio. What is this ratio, and how can you use it when thinking about ga...

Q: Refer to the information in Problem 6-33. Assume the

Refer to the information in Problem 6-33. Assume the following: Pet Luggage (PL) does not make any sales on credit. PL sells only to the public, and accepts cash and credit cards; 90% of its sales are...

Q: Retail outlets purchase snowboards from Slopes, Inc., throughout the year

Retail outlets purchase snowboards from Slopes, Inc., throughout the year. However, in anticipation of late summer and early fall purchases, outlets ramp up inventories from May through August. Outlet...

Q: On December 1, 2011, the Itami Wholesale Co. is

On December 1, 2011, the Itami Wholesale Co. is attempting to project cash receipts and disbursements through January 31, 2012. On this latter date, a note will be payable in the amount of $100,000. T...

Q: Borkenstick makes a very popular undyed cloth sandal in one style,

Borkenstick makes a very popular undyed cloth sandal in one style, but in Regular and Deluxe. The Regular sandals have cloth soles and the Deluxe sandals have cloth covered wooden soles. Borkenstick i...

Q: Nunez Company expects to have a cash balance of $45,

Nunez Company expects to have a cash balance of $45,000 on January 1, 2020. Relevant monthly budget data for the first two months of 2020 are as follows: Prepare a cash budget for two months. 1. Colle...

Q: Pink Martini Corporation is projecting a cash balance of $30,

Pink Martini Corporation is projecting a cash balance of $30,000 in its December 31, 2019, balance sheet. Pink Martini's schedule of expected collections from customers for the first quarter of 2020 s...

Q: Pisani Dental Clinic is a medium-sized dental service specializing in

Pisani Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the budget for the first two quarters of 2020. It still needs to do only the...

Q: The Big Boy Company is in a seasonal business and prepares quarterly

The Big Boy Company is in a seasonal business and prepares quarterly budgets. Its fiscal year runs from July 1 through June 30. Production occurs only in the first quarter (July to September), but sa...

Q: The controller of Kari Company estimates sales and production for the first

The controller of Kari Company estimates sales and production for the first four months of 2020 as follows: Prepare a cash budget for a month. January … February … March … April Sales $40,000 … $50,0...

Q: Nigh Company prepares monthly cash budgets. Relevant data from operating budgets

Nigh Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows: Prepare cash budget for two months. All sales are on account. The company expects collection...

Q: Raymond Co. began operations in January 2019. The information below

Raymond Co. began operations in January 2019. The information below is for Raymond Co.'s operations for the three months from January to March (the first quarter) of 2020: Prepare a cash budget. Expe...

Q: The controller of Harrington Company estimates sales and production for the first

The controller of Harrington Company estimates sales and production for the first four months of 2020 as follows: Prepare a cash budget for a quarter. Sales are 40% cash and 60% on account, and 60%...

Q: Kurian Industries' balance sheet at December 31, 2019, follows.

Kurian Industries' balance sheet at December 31, 2019, follows. Prepare budgeted income statement and balance sheet. / / Budgeted data for the year 2020 include the following: To meet sales requir...

Q: The Big Sister Company is in a seasonal business and prepares quarterly

The Big Sister Company is in a seasonal business and prepares quarterly budgets. Its fiscal year runs from January 1 through December 31. Production occurs only in the first quarter (January to March)...

Q: Rotech Co. began operations in January 2019. The information below

Rotech Co. began operations in January 2019. The information below is for Rotech Co.'s operations for the three months from January to March (the first quarter) of 2020: Prepare a cash budget. Expens...

Q: Lorch Company prepares monthly cash budgets. Relevant data from operating budgets

Lorch Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows: Prepare a cash budget for two months. All sales are on account. Lorch expects collections t...

Q: Howe Ltd. is trying to decide whether it is going to

Howe Ltd. is trying to decide whether it is going to need to take a loan in coming January to buy a new microcomputer system. The microcomputer will cost $8,800. The president, Joan Howe, has collecte...

Q: How can the two “bottom lines” of the cash budget

How can the two “bottom lines” of the cash budget be used to determine the firm’s short-term borrowing and investment requirements?

Q: Basic Grenoble Enterprises had sales of $50,000 in March

Basic Grenoble Enterprises had sales of $50,000 in March and $60,000 in April. Forecast sales for May, June, and July are $70,000, $80,000, and $100,000, respectively. The firm has a cash balance of $...

Q: Sam and Suzy Size man need to prepare a cash budget for

Sam and Suzy Size man need to prepare a cash budget for the last quarter of 2020 to make sure they can cover their expenditures during the period. Sam and Suzy have been preparing budgets for the past...

Q: The following represent financial transactions that Johnsfield & Co. will be

The following represent financial transactions that Johnsfield & Co. will be undertaking in the next planning period. For each transaction, check the statement or statements that will be affected...

Q:  Trotter Enterprises Inc. has gathered the following data to plan

 Trotter Enterprises Inc. has gathered the following data to plan for its cash requirements and short-term investment opportunities for October, November, and December. All amounts are sho...

Q: Brownstein Inc. expects sales of $100,000 during each

Brownstein Inc. expects sales of $100,000 during each of the next 3 months. It will make monthly purchases of $60,000 during this time. Wages and salaries are $10,000 per month plus 5% of sales. Brown...

Q: Christmas Inc. is a wholesaler of Christmas decorations and wrapping paper

Christmas Inc. is a wholesaler of Christmas decorations and wrapping paper. It is a seasonal business and, due to the timing of cash inflows and outflows, it frequently experiences a cash shortfall in...

Q: A firm has estimated its sales, purchases from suppliers, and

A firm has estimated its sales, purchases from suppliers, and wages and miscellaneous operating cash outlays for the first four months of next year as follows: It estimates that 50 percent of its sale...

Q: At the beginning of the school year, Priscilla Wescott decided to

At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 3...

Q: The controller of Mercury Shoes Inc. instructs you to prepare a

The controller of Mercury Shoes 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 ab...

Q: The controller of Bridgeport Housewares Inc. instructs you to prepare a

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...

Q: 1. A firm can estimate its short-term financing needs

1. A firm can estimate its short-term financing needs by which of the following? a. Using a cash budget b. Estimating its external financing needs c. Comparing credit sales to expenses d. The perc...

Q: Eastnorth’s suppliers are upset that Eastnorth takes two months to pay their

Eastnorth’s suppliers are upset that Eastnorth takes two months to pay their accounts payable; they demand that in the following year Eastnorth pay its bills within 30 days, or one month after the pur...

Q: Of its monthly sales, The Kingsman Company historically has had 25

Of its monthly sales, The Kingsman Company historically has had 25-percent cash sales with the remainder paid within one month. Each month’s purchases are equal to 75 percent of the next month’s sales...

Q: Redo Problem number 14, using the monthly sales estimates listed in

Redo Problem number 14, using the monthly sales estimates listed in the text. Data from Problem 14: Of its monthly sales, The Kingsman Company historically has had 25-percent cash sales with the rem...

Q: Using the information provided in problem 14, construct cash budgets from

Using the information provided in problem 14, construct cash budgets from each of the following scenarios. Use the data from problem 14 as the “base case.” What insights do we obtain from a cash budge...

Q: CD Later’s projected sales for the first four months of 201X are

CD Later’s projected sales for the first four months of 201X are January……………………………………………….$60,000 February………………………………………………$55,000 March …………………………………………………$65,000 April…………………………………………………….$70,000...

Q: “What do you mean we’ve used up all our cash and “What do you mean we’ve used up all our cash and

“What do you mean we’ve used up all our cash and lines of credit? I don’t get it! I thought we had a healthy financial position as per last year’s financial statements. How could this have happened, P...

Q: A company is to carry out a major modernization of its factory

A company is to carry out a major modernization of its factory commencing in two weeks, time. During the modernization, which is expected to take four weeks to complete, no production of the company’s...

Q: The Rosrock Housing Association has two types of housing estate in the

The Rosrock Housing Association has two types of housing estate in the Rosburgh area (A and B). The following information is available: (i) The association has its own squad of painters who carry out...

Q: This case study is taken from Ducker, J., Head,

This case study is taken from Ducker, J., Head, A., McDonnell, B., O'Brien, R. and Richardson, S. (1998), A Creative Approach to Management Accounting: Case Studies in Management Accounting and Contro...

Q: Lapps Inc. makes a gift product that sells best during the

Lapps Inc. makes a gift product that sells best during the holiday season. Retailers stock up in the fall so Lapps’ sales are largest in October and November and drop dramatically in...

Q: Explain the benefits of preparing a cash budget for an entity.

Explain the benefits of preparing a cash budget for an entity.

Q: The accountant for Roadrunner Food Services is preparing its cash budget for

The accountant for Roadrunner Food Services is preparing its cash budget for November and December 2021. The accountant, Ross Leon, has collected the following information regarding expected credit sa...

Q: Point Piper prepares monthly cash budgets. Provided below is a set

Point Piper prepares monthly cash budgets. Provided below is a set of relevant data extracted from existing reports, and the sub-budgets for the two months of September and October. All sales are on...

Q: The Red Bean Company processes and distributes beans. The beans are

The Red Bean Company processes and distributes beans. The beans are packed in 500 gram-plastic bags and sold to grocery chains for $0.50 each in boxes of 100 bags. During March the entity anticipates...

Q: The accountant at Fighting Kites has always prepared a budget that is

The accountant at Fighting Kites has always prepared a budget that is calculated using only one estimated volume of sales. He has asked you to help him set up a spreadsheet that can be used for sensit...

Q: Blowervacs produces and sells leaf blowers. Production levels are high in

Blowervacs produces and sells leaf blowers. Production levels are high in the summer and beginning of autumn and then taper off through the winter. Sales are high in autumn and early winter and then t...

Q: Whilst preparing the cash budget for next year, the accountant at

Whilst preparing the cash budget for next year, the accountant at Mines Ltd. identified a $20 million shortfall. This shortfall was due to a capital expenditure item of the same value. The CEO has ide...

Q: Ken Martin, manager of Lonnie Car Repairers, has requested that

Ken Martin, manager of Lonnie Car Repairers, has requested that you prepare a cash budget for the months of December and January. He has provided the following information to assist in this task. * Pr...

Q: Maryborough Manufacturing has projected sales in units for four months of operations

Maryborough Manufacturing has projected sales in units for four months of operations as follows: The product sells for $18 per unit. Twenty-five per cent of the customers are expected to pay in the...

Q: Explain the similarities and differences between the cash budget and the statement

Explain the similarities and differences between the cash budget and the statement of cash flows discussed in the statement of cash flows chapter.

Q: Ski Lifters is a business that provides a chairlift for tourists in

Ski Lifters is a business that provides a chairlift for tourists in the Alpine region. The peak season is in winter, with the low season during the summer months. Sales are high during the ski season...

Q: Twilight Enterprises has provided the following estimates relating to the first quarter

Twilight Enterprises has provided the following estimates relating to the first quarter of 2021. Cash sales ……………………………………………………………. $ 88 960 Credit sales ……………………………………………………………. 167 624 Receipts fro...

Q: Budget Travel plans to commence operations on 1 July 2021. The

Budget Travel plans to commence operations on 1 July 2021. The following data and estimates relate to the three months ending 30 September 2021. Required (a) Prepare a monthly cash budget for the thr...

Q: Garden Sculptures presents the following data relating to the expected operations for

Garden Sculptures presents the following data relating to the expected operations for the months of January to March 2021. Required (a) Prepare a cash budget on a monthly basis for the three months e...

Q: Hobby Gardens is a garden design and landscaping business. At 30

Hobby Gardens is a garden design and landscaping business. At 30 June 2021, it has a bank balance of $52 500. Provided below are estimates for receipts and payments for the three months ending 30 Sept...

Q: Chalkboard was commenced by Louis Turner. Chalkboard is an innovative technology

Chalkboard was commenced by Louis Turner. Chalkboard is an innovative technology company that provides a platform for the posting of best-practice teaching videos and commentary. Its strategy is focus...

Q: Mona Little, the accountant for Trailers 4 Hire, is currently

Mona Little, the accountant for Trailers 4 Hire, is currently preparing the budget for the coming year. One of the agenda items for next week’s finance meeting is consideration of whether an outstandi...

Q: M20 Company has presented the following estimates relating to 2021 activities.

M20 Company has presented the following estimates relating to 2021 activities. Sales in the December quarter of 2020 are $345 000. All sales are on credit, of which 55 per cent are collected in the q...

Q: Realty Company prepares monthly cash budgets. Provided next is a set

Realty Company prepares monthly cash budgets. Provided next is a set of relevant data extracted from existing reports and the sub-budgets for the two months of September and October 2021. All sales a...

Q: Glenn Stone, manager of Jarrett Car Repairers, has requested that

Glenn Stone, manager of Jarrett Car Repairers, has requested that you prepare a cash budget for the months of December and January. He has provided the following information to assist in this task. &a...

Q: Millen Corporation is a merchandiser that is preparing a master budget for

Millen Corporation is a merchandiser that is preparing a master budget for the month of July. The company’s balance sheet as of June 30 is shown below: Millen’s ma...

Q: You are a relatively recent hire to the Hartz & Co.,

You are a relatively recent hire to the Hartz & Co., a local manufacturer of plumbing supply products. You have been asked to prepare for a presentation to the company’s management a condensed stateme...

Q: Papst Company is preparing its cash budget for the month of May

Papst Company is preparing its cash budget for the month of May. The following information is available concerning its accounts receivable (based on sales made to customers on open account): Actual c...

Q: Tri-county Social Service Agency is a not-for-

Tri-county Social Service Agency is a not-for-profit organization in the Midwest. Use the following information to complete the cash budget for the year ending December 31.  * The Board of...

Q: CompUSA Inc. sells computer hardware. It also markets related software

CompUSA Inc. sells computer hardware. It also markets related software and software-support services. The company prepares annual forecasts for sales, which are given below. In a typical month, total...

Q: Triple-F Health Club (Family, Fitness, and Fun

Triple-F Health Club (Family, Fitness, and Fun) is a not-for-profit family-oriented health club. The club's board of directors is developing plans to acquire more equipment and to expand club faciliti...

Q: Mary and Kay, Inc., a distributor of cosmetics throughout Florida

Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the co...

Q: Alpha-Tech, a rapidly growing distributor of electronic components,

Alpha-Tech, a rapidly growing distributor of electronic components, is formulating its plans for 20x5. Carol Jones, the firm’s marketing director, has completed the following sales f...

Q: Why does the typical cash budget spread collection of sales revenue over

Why does the typical cash budget spread collection of sales revenue over more than one month?

Q: Why does the typical cash budget spread payment of purchases over more

Why does the typical cash budget spread payment of purchases over more than one month?

Q: Kelly’s Boutique is contemplating several means of financing their acquisition of $

Kelly’s Boutique is contemplating several means of financing their acquisition of $200,000 in special equipment. One alternative is to borrow $200,000 from a local bank for 10 years at 12 percent per...

Q: The Wine Depot is contemplating several alternative means of financing their annual

The Wine Depot is contemplating several alternative means of financing their annual acquisition of $70,000 in equipment. One option is to borrow $300,000 from a local bank for 5 years at 11 percent pe...

Q: Snick’s Board Shop is contemplating several alternative means of financing their acquisition

Snick’s Board Shop is contemplating several alternative means of financing their acquisition of $350,000 in new equipment in year 1. One option is to borrow $300,000 from a local bank. The bank has as...

Q: Rosey’s Roses is contemplating several alternative means of financing their acquisition of

Rosey’s Roses is contemplating several alternative means of financing their acquisition of $100,000 in new equipment in year 1. One option is to borrow $80,000 from a local bank. The bank has asked th...

Q: Artero Corporation is a traditional toy products retailer that recently started an

Artero Corporation is a traditional toy products retailer that recently started an Internet-based subsidiary that sells toys online. A markup is added on goods the company purchases from manufacturers...

Q: The PDC Company was described earlier in this chapter. Refer to

The PDC Company was described earlier in this chapter. Refer to the PDC Company’s projected monthly operating schedules in Table 6.2. PDC’s sales are projected to b...

Q: Rework Problem 3 based on the assumption that, because of an

Rework Problem 3 based on the assumption that, because of an unexpected order, PDC’s sales are forecasted to be $160,000 for September 2020. Data from Problem 3: The PDC Company was...

Q: Walter Company has the following information for the month of March:

Walter Company has the following information for the month of March: Walter pays wages and other cash expenses in the month incurred. Manufacturing overhead includes $1,200 for machinery depreciation,...

Q: Why is the preparation of a cash budget important?

Why is the preparation of a cash budget important?

Q: FG is preparing its cash budgets for January, February and March

FG is preparing its cash budgets for January, February and March. Budgeted data are as follows: The selling price per unit is £200. The purchase price per kg of raw material is Â&po...

Q: Motors Corp. manufactures motors for dirt bikes. The company requires

Motors Corp. manufactures motors for dirt bikes. The company requires a minimum $30,000 cash balance at each month-end. If necessary, the company borrows to meet this requirement at a cost of 2% inter...

Q: Prepare a budgeted balance sheet at March 31 using the following information

Prepare a budgeted balance sheet at March 31 using the following information from Zimmer Company. a. The cash budget for March shows an ending loan balance of $10,000 and an ending cash balance of $50...

Q: Aztec Company sells its product for $180 per unit. Its

Aztec Company sells its product for $180 per unit. Its actual and budgeted sales follow. All sales are on credit. Collections are as follows: 30% is collected in the month of the sale, and the remaini...

Q: Connick Company sells its product for $22 per unit. Its

Connick Company sells its product for $22 per unit. Its actual and budgeted sales follow. All sales are on credit where 40% is collected in the month of the sale, and the remaining 60% is collected in...

Q: Santos Co. is preparing a cash budget for February. The

Santos Co. is preparing a cash budget for February. The company has $20,000 cash at the beginning of February and budgets $75,000 in cash receipts from sales and $100,250 in cash payments during Febru...

Q: The following budget information relates to Flossy Limited for the three months

The following budget information relates to Flossy Limited for the three months to 31 March 2021: 3 Capital expenditure to be incurred on 20 February 2021 is expected to amount to £470,00...

Q: Explain why it is necessary to distinguish between cash budget estimates and

Explain why it is necessary to distinguish between cash budget estimates and operating budget estimates.

Q: On March 1 of the current year, Spicer Corporation compiled information

On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company’s sales are made on account. The follow...

Q: Barley, Inc., wants a projection of cash receipts and cash

Barley, Inc., wants a projection of cash receipts and cash payments for the month of November. On November 28, a note will be payable in the amount of $102,250, including interest. The cash balance on...

Q: Peter Corporation sells its products to a single customer. At the

Peter Corporation sells its products to a single customer. At the beginning of the current quarter, the company reports the following selected account balances. Peter’s management h...

Q: Sunder’s has been in business since January of the current year.

Sunder’s has been in business since January of the current year. The company buys fresh pasta and resells it to large supermarket chains in five states. The following information per...

Q: Ann Hoffman, owner of Hoffman Industries, is negotiating with the

Ann Hoffman, owner of Hoffman Industries, is negotiating with the bank for a $250,000, 90-day, 15 percent loan effective July 1 of the current year. If the bank grants the loan, the net proceeds will...

Q: The purpose of this problem is to demonstrate some of the interrelationships

The purpose of this problem is to demonstrate some of the interrelationships in the budgeting process. Shown as follows is a very simple balance sheet at January 1, along with a simple budgeted income...

Q: Barnum Distributors wants a projection of cash receipts and cash payments for

Barnum Distributors wants a projection of cash receipts and cash payments for the month of November. On November 28, a note will be payable in the amount of $98,500, including interest. The cash balan...

Q: Former Corporation sells office supplies to government agencies. At the beginning

Former Corporation sells office supplies to government agencies. At the beginning of the current quarter, the company reports the following selected account balances. Former’s manag...

Q: Rizzo’s has been in business since January of the current year.

Rizzo’s has been in business since January of the current year. The company buys frozen pizza Crusts and resells them to large supermarket chains in five states. The following inform...

Q: Jake Marley, owner of Marley Wholesale, is negotiating with the

Jake Marley, owner of Marley Wholesale, is negotiating with the bank for a $200,000, 90-day, and 12 percent loan effective July 1 of the current year. If the bank grants the loan, the proceeds will be...

Q: LeeAnn Ortiz owns a retail store that sells new and used sporting

LeeAnn Ortiz owns a retail store that sells new and used sporting equipment. LeeAnn has requested a cash budget for October. After examining the records of the company, you find the following: a. Cash...

Q: Bernard Creighton is the controller for Creighton Hardware Store. In putting

Bernard Creighton is the controller for Creighton Hardware Store. In putting together the cash budget for the fourth quarter of the year, he has assembled the following data. a. Sales July (actual) $1...

Q: Friendly Freddie’s is an independently owned major appliance and electronics discount chain

Friendly Freddie’s is an independently owned major appliance and electronics discount chain with seven stores located in a Midwestern metropolitan area. Rapid expansion has created t...

Q: Shalimar Company manufactures and sells industrial products. For next year,

Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: Quarter 1 $4,600,000 Quarter 2 5,100,000 Quarter 3 5,000,000 Quarter 4 7,600,000 In...

Q: Khloe Company imports gift items from overseas and sells them to gift

Khloe Company imports gift items from overseas and sells them to gift shops and department stores throughout the United States. Khloe Company provided the following information: a. The October 31 bala...

Q: The accountant for Jean’s Dress Shop prepared the following cash budget.

The accountant for Jean’s Dress Shop prepared the following cash budget. Jean’s desires to maintain a cash balance of $10,000 at the end of each month. Funds are as...

Q: Oscar Fox, the accounting manager of Onaka Antique Company, is

Oscar Fox, the accounting manager of Onaka Antique Company, is preparing his company’s cash budget for the next quarter. Onaka desires to maintain a cash balance of $2,000 at the end...

Q: The accountant for Nelly’s Dress Shop prepared the fourth quarter 2017 cash

The accountant for Nelly’s Dress Shop prepared the fourth quarter 2017 cash budget that appears on the following spreadsheet. Nelly’s has a policy to maintain a min...

Q: 1. Indicate whether each of the following items is representative of

1. Indicate whether each of the following items is representative of financial or managerial accounting. 2. Financial results used by stockbrokers to evaluate a company’s profitability. 3. Quarterly b...

Q: The primary reason for preparing a cash budget is to determine the

The primary reason for preparing a cash budget is to determine the amount of cash to include on the budgeted balance sheet. Do you agree or disagree with this statement? Explain.

Q: All sales at Alaska Company are on credit. The company is

All sales at Alaska Company are on credit. The company is preparing a cash budget for November. The following information on accounts receivable collections is available from customer payment history:...

Q: Hackett Produce Supply is preparing its cash budget for April. The

Hackett Produce Supply is preparing its cash budget for April. The following information is available: Required What is the estimated amount of cash receipts from accounts receivable collections in Ap...

Q: The board of directors of the Cortez Beach Yacht Club (CBYC

The board of directors of the Cortez Beach Yacht Club (CBYC) is developing plans to acquire more equipment for lessons and rentals and to expand club facilities. The board plans to purchase about $50,...

Q: Lane Products manufactures a popular kitchen utensil. The company recently expanded

Lane Products manufactures a popular kitchen utensil. The company recently expanded, and the controller believes that it will need to borrow cash to continue operations. It opened negotiations with th...

Q: Refer to the data in Problem 13-68. Required

Refer to the data in Problem 13-68. Required a. Prepare a cash budget for the year. b. The owners want to ensure that they have cash on hand at the end of the year equal to the current accounts payabl...

Q: Our cash budget shows a surplus for the quarter so we do

Our cash budget shows a surplus for the quarter so we do not have to think about arranging any bank financing.” Comment on this statement.

Q: Evergreen Furniture, a retailing company, is preparing the cash budget

Evergreen Furniture, a retailing company, is preparing the cash budget for August. The following inventory information is available: Required What are the estimated cash disbursements in August?

Q: What is the purpose of the cash budget if the budgeted income

What is the purpose of the cash budget if the budgeted income statement will indicate whether the firm expects to be profitable?

Q: Refer to the information in Problem 6-40. Assume

Refer to the information in Problem 6-40. Assume the following: Animal Gear (AG) does not make any sales on credit. AG sells only to the public and accepts cash and credit cards; 90% of its sales are...

Q: Refer to the information in Problem 6-42. Budgeted

Refer to the information in Problem 6-42. Budgeted balances at January 31, 2021, are as follows: Selected budget information for December 2020 follows: Customer invoices are payable within 30 days. Fr...

Q: Refer to the information in Problem 6-44. All

Refer to the information in Problem 6-44. All purchases made in a given month are paid for in the following month, and direct material purchases make up all of the accounts payable balance and are ref...

Q: Tyva makes a very popular undyed cloth sandal in one style,

Tyva makes a very popular undyed cloth sandal in one style, but in Regular and Deluxe. The Regular sandals have cloth soles and the Deluxe sandals have cloth-covered wooden soles. Tyva is preparing it...

Q: Amira Ltd is a trading company that sells mobile phones. The

Amira Ltd is a trading company that sells mobile phones. The opening cash balance on January 1 was expected to be £30,000. The sales budgeted were as follows: Analysis of records shows th...

Q: ABC Company has a cash balance of $22,000 on

ABC Company has a cash balance of $22,000 on August 1 and requires a minimum ending cash balance of $20,000. Cash receipts from sales budgeted for August are $306,180. Cash disbursements budgeted for...

Q: Refer to the PrimeTime Sportswear data. Required: a

Refer to the PrimeTime Sportswear data. Required: a. Prepare a cash budget for August and September. What are the prospects for this company if its sales growth continues at a similar rate? b. Assume...