Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters asfollows:Q1Q2 Q3 Q4Sales $115 $135 $155 $185Sales for the first quarter of the following year are projected at $130 million. Accountsreceivable at the beginning of the year were $51 million. Wildcat has a 45-day collectionperiod.Wildcat's purchases from suppliers in a quarter are equal to 45 percent of the nextquarter's forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, andother expenses run about 20 percent of sales. Interest and dividends are $11 million perquarter.Wildcat plans a major capital outlay in the second quarter of $70 million. Finally, thecompany started the year with a cash balance of $68 million and wishes to maintain a$30 million minimum balance.a. Complete the following cash budget for Wildcat, Incorporated. (A negativeanswer should be indicated by a minus sign. Do not round Intermediatecalculations and enter your answers in millions, not dollars, rounded to 2 decimalplaces, e.g.. 32.16.)Beginning cash balanceNet cash inflowEnding cash balanceMinimum cash balanceCumulative surplus (deficit)WILDCAT, INCORPORATEDCash Budget(in millions)Q1$ 68.00New short-term borrowingInterest on short-term borrowingShort-term borrowing repaidEnding cash balanceMinimum cash balanceCumulative surplus (deficit)Target cash balanceNet cash inflowNew short-term investmentsIncome from short-term investmentsShort-term investments sold-30.00Beginning short-term investmentsEnding short-term investmentsBeginning short-term debtEnding short-term debtQ2-30.00Assume that Wildcat can borrow any needed funds on a short-term basis at a rate of 4percent per quarter and can Invest any excess funds in short-term marketable securitiesat a rate of 3 percent per quarter.$b-1. Complete the following short-term financial plan for Wildcat. Incorporated. (Anegative answer should be indicated by a minus sign. Do not round Intermediatecalculations and enter your answers in millions, not dollars, rounded to 2 decimalplaces, e.g., 3216. Leave no cells blank - be certain to enter "0" whereverrequired.)WILDCAT, INCORPORATEDShort-Term Financial Plan(in millions)Q130.00 SQ3-30.00-30.00Q2Q430.00 $-30.00-30.00Q330.00 $-30.00Q430.00-30.00b-2. What is the net cash cost (total Interest paid minus total Investment Income earned)for the year? (A negative answer should be Indicated by a minus sign. Do notround Intermediate calculations and enter your answer in millions, not dollars.rounded to 2 decimal places, e.g., 32.16.)

A cash budget is an estimate of the cash flow of a business over a specific period of time. This…

Wildcat, Incorporated, has estimated sales (in millions) for the next four quarters as follows: Q1 Q2 Q3 Q4 Sales $115 $135 $155 $185 Sales for the first quarter of the following year are projected at $130 million. Accounts receivable at the beginning of the year were $51 million. Wildcat has a 45-day collection period. Wildcat's purchases from suppliers in a quarter are equal to 45 percent of the next quarter's forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 20 percent of sales. Interest and dividends are $11 million per quarter. Wildcat plans a major capital outlay in the second quarter of $70 million. Finally, the company started the year with a cash balance of $68 million and wishes to maintain a $30 million minimum balance. a. Complete the following cash budget for Wildcat. Incorporated. (A negative answer should be indicated by a minus sign. Do not round Intermediate calculations and enter your answers in millions, not dollars, rounded to 2 decimal places, e.g.. 32.16.) Beginning cash balance Net cash inflow Ending cash balance Minimum cash balance Cumulative surplus (deficit) WILDCAT, INCORPORATED Cash Budget (in millions) 19 Q1 68.00 -30.00 Q2 -30.00 Q3 -30.00 Q4 -30.00

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter22: Master Budget (master)

Section: Chapter Questions

Problem 1R: Ranger Industries has provided the following information at June 30: Other information: Average...