he following information is drawn from Royal Industries' cash budget: Cash Receipts Beginning Cash Balance Cash Payments Desired Ending Cash Cushion $40,300 $13,000 $48,900 $ 8,000 If there is a cash shortage, the company borrows money. If a surplus occurs funds are used to repay loans or to invest in short-term as had no debt before January 1st. The amounted "needed" to borrow or the amount "available" for repayment of debt in January would Multiple Choice $4,400 available. $3,600 needed.

he following information is drawn from Royal Industries' cash budget: Cash Receipts Beginning Cash Balance Cash Payments Desired Ending Cash Cushion $40,300 $13,000 $48,900 $ 8,000 If there is a cash shortage, the company borrows money. If a surplus occurs funds are used to repay loans or to invest in short-term as had no debt before January 1st. The amounted "needed" to borrow or the amount "available" for repayment of debt in January would Multiple Choice $4,400 available. $3,600 needed.

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter21: Budgeting

Section: Chapter Questions

Problem 9DQ: A. Discuss the purpose of the cash budget. B. If the cash for the first quarter of the fiscal year...

See similar textbooks

Similar questions

What is the amount of budgeted cash payments if purchases are budgeted for $420,000 and the beginning and ending balances of accounts payable are $95,000 and $92,000, respectively?
What is the amount of budgeted cash payments if purchases are budgeted for $190,500 and the beginning and ending balances of accounts payable are $21,000 and $25,000, respectively?
A. Discuss the purpose of the cash budget. B. If the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might the excess cash be used?
The following information was taken from Trusted Care Company's cash budget for the month of April: Beginning cash balance Cash receipts Cash disbursements If the company has a policy of maintaining an end of the month minimum cash balance of $25,000, the amount the company would have to borrow is $10,000 $13,000 $11,000 $0 $27,000 62,000 75,000
The following information was taken from Nash's Trading Post, LLC cash budget for the month of June Beginning cash balance $51000 Cash receipts 69000 Cash disbursements 87000 If the company has a policy of maintaining an end of the month cash balance of $44000, the amount the company would have to borrow is $11000. $27000. $18000. $0.
The president of the retailer Prime Products has just approached the company's bank with a request for a $91,000, 90-day loan. The purpose of the loan is to assist the company in acquiring Inventories. Because the company has had some difficulty in paying off its loans in the past, the loan officer has asked for a cash budget to help determine whether the loan should be made. The following data are available for the months April through June, during which the loan will be used: a. On April 1, the start of the loan period, the cash balance will be $15,800. Accounts receivable on April 1 will total $176,400, of which $151,200 will be collected during April and $20,160 will be collected during May. The remainder will be uncollectible. b. Past experience shows that 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% is bad debts that are never collected. Budgeted sales and expenses for the…
Prepare a cash budget for May. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Minden Company Cash Budget For the Month of May Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Purchase of inventory Selling and administrative expenses Purchases of equipment Total cash disbursements Excess of cash available over disbursements Financing: Borrowing-note Repayments-note Interest Total financing Ending cash balance $ 0 0 0 0 0
The following information was taken from Swifty Corporation cash budget for the month of July: Beginning cash balance $95000 Cash receipts 91000 Cash disbursements 129000 If the company has a policy of maintaining an end of the month cash balance of $95000, the amount the company would have to borrow is $57000. $38000. $19000. $24000. The following information was taken from Swifty Corporation cash budget for the month of July: Beginning cash balance $95000 Cash receipts 91000 Cash disbursements 129000 If the company has a policy of maintaining an end of the month cash balance of $95000, the amount the company would have to borrow is $57000. $38000. $19000. $24000. The following information was taken from Swifty Corporation cash budget for the month of July: Beginning cash balance $95000 Cash receipts 91000 Cash disbursements 129000 If the company has a policy of maintaining an end of the month cash balance of $95000, the…
A cash budget, by quarters, is given below for a retall company (000 omitted). The company requires a minimum cash balance of at least $6,000 to start each quarter. Required: Fill in the missing amounts. (Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign.) Cash balance, beginning Add collections from customers Total cash available Less disbursements: Purchase of inventory Selling and administrative expenses Equipment purchases Dividends Total disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments (including interest) Total financing Cash balance, ending interest will total $1,000 the Quarter 1 (000 omitted) $ 6 S 80 86 43 34 15 Quarter 2 (000 omitted) 2 94 (8) 6 S 53 32 8 2 Quarter 3 (000 omitted) 95 6 104 110 30 18 2 11 Quarter 4 (000 omitter) $ 35 10 2 (10) Year (000 omitted) $ 6 370 118 51 8
Cash budget 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: July August $160,000 $185,000 $200,000 66,000 82,000 105,000 51,000 120,000 40,000 46,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent $12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in February, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Sales Manufacturing costs Selling and administrative expenses Capital expenditures June Current assets as of June 1 include cash of $42,000,…
The following information was taken from Concord Corporation cash budget for the month of July: Beginning cash balance $100000 Cash receipts 96000 Cash disbursements 136000 If the company has a policy of maintaining an end of the month cash balance of $100000, the amount the company would have to borrow is
A cash budget is prepared for a retail company. The company requires a minimum cash balance of at least $5,000 to start each quarter. Fill in the missing amounts (Note: Omit 000's in your answers). Quarter 1 3 3 4 Year Cash Balance, Beginning $ 6 Add: Collections from Customers 93 322 Total Cash Available before current financing 66 Deduct Disbursements: Purchase of Inventory 36 46 35 Operating Expenses 33 31 114 Equipment Purchases 10 10 11 35 Dividends 2 2 2 2 Total Disbursements 91…