Can you please answer question A thanks.Please make it clear enough so I can understand. Thanks in advance The management accountant at Miller Merchandising & More, Odail Russell is in the process ofpreparing the cash budget for the business for the fourth quarter of 2021. It is customary for thebusiness to borrow money during this quarter. Extracts from the sales and purchases budgets areas follows:Continued.ix)Taxation of $85,000 has to be settled in December.х)A money market instrument purchased by the company with a face value of $300,000 willCashSalesSalesOn Accountmature on October 15, 2021. In order to meet the financial obligations of the business,management has decided to liquidate the investment upon maturity. On that date quarterlyinterest computed at a rate of 5% per annum is also expected to be collected.MonthPurchasesAugustSeptemberOctober$85,000$70,000$88,550$77,160$174,870$640,000$550,000$600.000$800,000$420.000$550,000$500,000$600,000$450,000xi)The cash balance at December 31, 2021 is expected to be an overdraft of $236,000.NovemberDecember$500,000i)An analysis of the records shows that trade receivables are settled according to theRequired:following credit pattern, in accordance with the credit terms 4/30, n90:The business needs to have a sense of its future cashflows and therefore requires thepreparation of the following:50% in the month of sale(a)30% in the first month following the sale20% in the second month following the saleA schedule of budgeted cash collections for trade receivables (sales on account) for each ofthe months October to December.ii)Expected purchases include monthly cash purchases of 5%. All other purchases are onaccount. Accounts payable are settled as follows, in accordance with the credit terms -2/30, п60-• A schedule of expected cash disbursements for accounts payable (purchases on account)for each of the months October to December.60% in the month in which the inventory is purchased40% in the following month• A cash budget, with a total column, for the quarter ending December 31, 2021, showing theexpected cash receipts and payments for each month and the ending cash balance for eachof the three months, given that no financing activities took place.ii)Fixed operating expenses which accrue evenly throughout the year, are estimated to be$1,680,000 per annum, (including depreciation on non-current assets of $420,000 perannum) and is settled monthly.iv)Wages and salaries are expected to be $2,280,000 per annum and will be paid monthly.v)Other operating expenses are expected to be $108,000 per quarter and will be settledmonthly.In the month of November, an old motor vehicle, which cost $650,000, will be sold to anemployee at a gain of $30,000. Accumulated depreciation on the motor vehicde at that timeis expected to be $540,000. The employee will be allowed to pay a deposit equal to 60% ofthe selling price in November and the balance settled in two equal amounts in December2021 & January of 2022.vi)vii)Computer equipment, which is estimated to cost $320,000, will be acquired in November.The manager has made arrangements with the dealer to make a cash deposit of 50% of theamount upon signing of the agreement in November, with the balance to be settled in fourequal monthly instalments, starting in December 2021

Budgeting is an estimates of total cash inflows and outflows prepared by an entity for its future…

The management accountant at Miller Merchandising & More, Odail Russell is in the process of preparing the cash budget for the business for the fourth quarter of 2021. It is customary for the business to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows: Cash Sales On Account $640,000 $550,000 $600,000 $800,000 Month Purchases $420,000 $550,000 Sales August September October November December $85,000 $70,000 $88,550 $77,160 $500,000 $600,000 $450,000 $174,870 $500,000 1) An analysis of the records shows that trade receivables are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90: 30% in the first month following the sale 20% in the second month following the sale

The management accountant at Miller Merchandising & More, Odail Russell is in the process of preparing the cash budget for the business for the fourth quarter of 2021. It is customary for the business to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows: Cash Sales On Account $640,000 $550,000 $600,000 $800,000 Month Purchases $420,000 $550,000 Sales August September October November December $85,000 $70,000 $88,550 $77,160 $500,000 $600,000 $450,000 $174,870 $500,000 1) An analysis of the records shows that trade receivables are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90: 30% in the first month following the sale 20% in the second month following the sale

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterMB: Model-building Problems

Section: Chapter Questions

Problem 22M

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CASH BUDGETING Helen Bowers, owner of Helens 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 2019 and 2020: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2019. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal, and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.
A companys controller is adjusting next years budget to reflect the impact of an expected 3 percent inflation rate. Listed below are selected items from next years budget before the adjustment. After adjusting for the 3 percent inflation rate, what is the companys total budget for the selected items before taxes for next year? a. 858,150 b. 860,412 c. 810,971 d. 858,971
The management accountant at Miller Merchandising & More, Odail Russell is in the process of preparing the cash budget for the business for the fourth quarter of 2021. It is customary for the business to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows: i) An analysis of the records shows that trade receivables are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90:50% in the month of sale30% in the first month following the sale20% in the second month following the sale ii) Expected purchases include monthly cash purchases of 5%. All other purchases are on account. Accounts payable are settled as follows, in accordance with the credit terms – 2/30, n60:60% in the month in which the inventory is purchased40% in the following month iii) Fixed operating expenses which accrue evenly throughout the year, are estimated to be $1,680,000 per annum, (including depreciation on non-current assets of…
The management accountant at Miller Merchandising & More, Odail Russell is in the process of preparing the cash budget for the business for the fourth quarter of 2021. It is customary for the business to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows: i) An analysis of the records shows that trade receivables are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90:50% in the month of sale30% in the first month following the sale20% in the second month following the sale ii) Expected purchases include monthly cash purchases of 5%. All other purchases are on account. Accounts payable are settled as follows, in accordance with the credit terms – 2/30, n60:60% in the month in which the inventory is purchased40% in the following month iii) Fixed operating expenses which accrue evenly throughout the year, are estimated to be $1,680,000 per annum, (including depreciation on non-current assets of…
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Pelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022. Extracts from the sales and purchases budgets are as follows: An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following the saleThe remaining 2% is expected to be uncollectible Accounts payable are settled as follows, in accordance with the credit terms 2/30, n60:85% in the month in which the inventory is purchased15% in the following month The management of Pelican Merchandising has negotiated with a tenant to sublet…
The management accountant at Miller Merchandising & More, Odail Russell is in the process of preparing the cash budget for the business for the fourth quarter of 2021. It is customary for the business to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows: i) An analysis of the records shows that trade receivables are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90: 50% in the month of sale 30% in the first month following the sale 20% in the second month following the sale ii) Expected purchases include monthly cash purchases of 5%. All other purchases are on account. Accounts payable are settled as follows, in accordance with the credit terms – 2/30, n60: 60% in the month in which the inventory is purchased 40% in the following month iii) Fixed operating expenses which accrue evenly throughout the year, are estimated to be $1,680,000 per annum, (including depreciation on non-current assets…
Please show working so I can follow The management accountant at Miller Merchandising & More, Odail Russell is in the process of preparing the cash budget for the business for the fourth quarter of 2021. It is customary for the business to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows: i) An analysis of the records shows that trade receivables are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90:50% in the month of sale30% in the first month following the sale20% in the second month following the sale ii) Expected purchases include monthly cash purchases of 5%. All other purchases are on account. Accounts payable are settled as follows, in accordance with the credit terms – 2/30, n60:60% in the month in which the inventory is purchased40% in the following month iii) Fixed operating expenses which accrue evenly throughout the year, are estimated to be $1,680,000 per annum, (including…
Pelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022. Extracts from the sales and purchases budgets are as follows: An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following the saleThe remaining 2% is expected to be uncollectible Accounts payable are settled as follows, in accordance with the credit terms 2/30, n60:85% in the month in which the inventory is purchased15% in the following month The management of Pelican Merchandising has negotiated with a tenant to sublet…
Pelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022. Extracts from the sales and purchases budgets are as follows: An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following the saleThe remaining 2% is expected to be uncollectible Accounts payable are settled as follows, in accordance with the credit terms 2/30, n60:85% in the month in which the inventory is purchased15% in the following month The management of Pelican Merchandising has negotiated with a tenant to sublet…
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