Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Textbook Question
Chapter 22, Problem 3R
Review the completed
- a. Is Ranger Industries expecting to earn a profit during the next quarter? If so, how much?
- b. Does the company need to borrow cash during the quarter? Can it make any repayments? Explain. (Carefully review rows 74 through 80.)
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I have a finance team at work. As the year progresses, they need to maintain a record of cash
flow and expenditure. What will they be required to do as a first step to building a budget?
Question 1Select one: A. Find out the balance sheet of the company B. Find the profit and
loss for the previous year C. Identify the expenditure and demand along with the cash flow of
the company D. Build an income and expenditure statement Incorrect
When gathering financial information, the entrepreneur
should develop a budget that includes expected sales
and expense figures for the first year. True or false
4.-To budget the customer balance in the projected balance sheet, two procedures can be followed that are hidden in the answers, which are?
A) Opening balance plus credit sales for the budgeted period minus collections made.
B) Apply current turnover to the budgeted period.
C) Perform an aging analysis of customer balances.
D) Project sales and outstanding balances for the last "n" years.
E) Perform an actuarial calculation.
Note:You can choose more than one option.
Chapter 22 Solutions
Excel Applications for Accounting Principles
Ch. 22 - Ranger Industries has provided the following...Ch. 22 - Open the file MASTER from the website for this...Ch. 22 - Review the completed master budget and answer the...Ch. 22 - Suppose the company has to revise its estimates...Ch. 22 - Suppose the company has just the opposite news and...Ch. 22 - Prob. 6R
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 4.-To budget the customer balance in the projected balance sheet, two procedures can be followed that are hidden in the answers, which are? A) Opening balance plus credit sales for the budgeted period minus collections made. B) Apply current turnover to the budgeted period. C) Perform an aging analysis of customer balances. D) Project sales and outstanding balances for the last "n" years. E) Perform an actuarial calculation. Note:You can choose more than one option. Please double check your answer.arrow_forwardPerform a sensitivity analysis on the budget for values from $5,000 to $35,000 inincrements of $5,000. Construct a graph of percentage reach versus budget. Is theadditional increase in percentage reach monotonically decreasing as the budget allocationincreases? Why or why not? What is your recommended budget? Explain.arrow_forwardThe 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?arrow_forward
- Which of the following statements is true about a cash budget? Question 35 options: Cash budget provides a means of estimating how long it will take for a product to reach the break-even point and, therefore, how much money will be needed to launch a new product. Cash budget summarizes the cash flows into and out of a firm over a period of time. Cash budget focuses on the importance of maximizing a product’s per unit contribution. Cash budget helps an entrepreneur understand the concept of EBITDA break-even and how to calculate this point for each product a business’s produce.arrow_forwardAs a manager responsible for an operating budget, you will usually be expected to compare your department's actual expenses to your budgeted expenses as well as to its performance in prior periods. True FalseMy nephew has promised to repay a loan by making $1,200.00 payments in April of each of the next 5 years. Using the Present Value Table found in Appendix 13-A on page 141, and assuming an interest rate of 5%, what is the value of these payments? a. $3,917.04 b. $4,329.40 c. $5,195.28 d.arrow_forwardAs a manager responsible for an operating budget, you will usually be expected to compare your department's actual expenses to your budgeted expenses as well as to its performance in prior periods. True FalseMy nephew has promised to repay a loan by making $1,200.00 payments in April of each of the next 5 years. Using the Present Value Table found in Appendix 13-A on page 141, and assuming an interest rate of 5%, what is the value of these payments?arrow_forward
- Required: A) The business needs to have a sense of its future cash flows and therefore requires the preparation of the following: ▪ A cash budget, with a total column, for the quarter ending March 31, 2022, showing the expected cash receipts and payments for each month and the ending cash balance for each of the three months, given that no financing activities took place. B) Another team member who is preparing the Budgeted Balance Sheet for the business for the same quarter ending March 31, 2022 and has asked you to furnish him with the figures for the expected trade receivables and payables to be included in the statement. Is that a reasonable request? If yes, what should these amounts be? C) Upon receipt of the budget, the team manager, June Jackson, has now informed you that, in keeping with industry players, the management of Pelican Merchandising have indicated an industry requirement to maintain a minimum cash balance of $185,000 each month. She has also noted that management is…arrow_forwardCarefully study the following cash budget and determine the amount to be borrowed or repaid during each quarter, so that the company never ends a quarter with less than $50,000 cash on hand, and always repays as much debt as possible. There is no debt as of the beginning of the first quarter, and interest costs are assumed not significant in this analysis. Use the pick lists associated with the boxed areas near the bottom of the spreadsheet to determine the right amounts to borrow and repay each quarter. Correct choices will result in the boxed areas turning green. Cash budget Beginning cash Customer receipts Available cash Less: disbursements Direct materials Direct labor Factory overhead SG&A Other expense and tax Equipment purchases Total disbursements Cash surplus (deficit) Financing: Planned borrowing Planned repayment Ending cash balance First Quarter 10,000 150,000 140,000 28,000 13,500 14,000 11,000 0 31,000 97,500 0 52,500 52,500 0 Second Quarter 52,500 212,500 160,000 30,000…arrow_forwardPlease include calculations a. What are the total expected cash collections for the year under this revised budget? b. What is the total required production for the year under this revised budget? c. What is the total cost of raw materials to be purchased for the year under this revised budget? d. What are the total expected cash disbursements for raw materials for the year under this revised budget?arrow_forward
- Why is it important to prepare a financial budget? Explain what is meant by the term "time value of money". For example, why might it be better to receive $8 today, over receiving a promise of $9 seven years from now? How should one consider the time value of money when planning for retirement? Please share examples within your response.arrow_forwardA. 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?arrow_forwardIn an attempt to better understand RR’s cash position, Johnson developed a cash budget for the first 2 months of the year. She has the figures for the other months, but they are not shown. After looking at the cash budget, answer the following questions: What does the cash budget show regarding the target cash level? Should depreciation expense be explicitly included in the cash budget? Why or why not? What are some other potential cash inflows besides collections? How can interest earned or paid on short-term securities or loans be incorporated in the cash budget? In her preliminary cash budget, Johnson has assumed that all sales are collected and thus that RR has no bad debts. Is this realistic? If not, how would bad debts be dealt with in a cash budgeting sense? (Hint: Bad debts will affect collections but not purchases.)arrow_forward
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