Zhang Industries is preparing a cash budget for June. The company has $32,500 cash at the beginning of June and anticipates $104,000 in cash receipts and $130,040 in cash payments during June. The company has no loans outstanding on June 1. Compute the amount the company must borrow, if any, to maintain a $22,000 cash balance. Multiple Choice O $28,460 $16,540 D

Zhang Industries is preparing a cash budget for June. The company has $32,500 cash at the beginning of June and anticipates $104,000 in cash receipts and $130,040 in cash payments during June. The company has no loans outstanding on June 1. Compute the amount the company must borrow, if any, to maintain a $22,000 cash balance. Multiple Choice O $28,460 $16,540 D

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter9: Profit Planning And Flexible Budgets

Section: Chapter Questions

Problem 45BEB: Pilsner Inc. purchases raw materials on account for use in production. The direct materials...

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A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000
Cash Budget 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 sales, 45% are collected within the month of sale. Half of the credit sales collected within the month receive a 2% cash discount (for accounts paid within 10 days). Thirty percent of credit sales are collected in the following month; remaining credit sales are collected the month thereafter. There are virtually no bad debts. c. Sales for the second two quarters of the year follow. (Note: The first 3 months are actual sales, and the last 3 months are estimated sales.) d. The company sells all that it produces each month. The cost of raw materials equals 26% of each sales dollar. The company requires a monthly ending inventory of raw materials equal to the coming months production requirements. Of raw materials purchases, 50% is paid for in the month of purchase. The remaining 50% is paid for in the following month. e. Wages total 105,000 each month and are paid in the month incurred. f. Budgeted monthly operating expenses total 376,000, of which 45,000 is depreciation and 6,000 is expiration of prepaid insurance (the annual premium of 72,000 is paid on January 1). g. Dividends of 130,000, declared on June 30, will be paid on July 15. h. Old equipment will be sold for 25,200 on July 4. i. On July 13, new equipment will be purchased for 173,000. j. The company maintains a minimum cash balance of 20,000. k. The cash balance on July 1 is 27,000. Required: Prepare a cash budget for July. Give a supporting schedule that details the cash collections from sales.
Pilsner Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: Pilsner typically pays 25% on account in the month of billing and 75% the next month. Required: 1. How much cash is required for payments on account in May? 2. How much cash is expected for payments on account in June?
Cheyenne Company has budgeted the following information for June: Cash receipts Beginning cash balance Cash payments Desired ending cash balance If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments, and interest is paid monthly at 1% on the first day of the following month. The company had no debt before June 1. The amount of interest paid on July 1 would be: Multiple Choice $590. $ 339,000 22,000 382,000 42,000 $476.
Bantam Industries has budgeted the following information for March: Cash receipts Beginning cash balance Cash payments Desired ending cash balance If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 Increments, and Interest is paid monthl on the first day of the following month. The company had no debt before March 1. How much cash will the company need to borrow In March? Multiple Choice $5,500 $ 283,000 8,000 298,000 28,000 The company should not need to borrow any cash in March $35,000 $29,500
Bantam Industries has budgeted the following information for March: Cash receipts Beginning cash balance Cash payments Desired ending cash balance $351,000 25,000 400,000 45,000 If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments, and interest is paid monthly at 1% on the first day of the following month. The company had no debt before March 1. How much cash will the company need to borrow in March?
The following information was taken from Southgate Industry’s cash budget for the month of July: Beginning cash balance $480,000 Cash receipts 304,000 Cash disbursements 544,000 If the company has a policy of maintaining a minimum end of the month cash balance of $400,000, the amount the company would have to borrow is Group of answer choices $240,000. $96,000. $80,000. $160,000.
Return t The following data are from the budget of Ritewell Publishers. Half the company's sales are transacted on a cash basis. The other half are paid for with a 1-month delay. The company pays all of its credit purchases with a 1-month delay. Credit purchases in January were $140, and total sales in January were $290. February March $ 420 April $ 400 Total sales $ 440 125 135 115 Cash purchases Credit purchases Labor and administrative purchases 95 85 95 85 85 85 Taxes, interest, and dividends 65 65 65 210 Capital expenditures Complete the following cash budget. (Leave no cells blank. Enter 'O' when necessary. Negative amounts should be indicated by a minus sign.) * Answer is complete but not entirely correct. February March April Sources of cash Collections on current sales IS 210 O S 220 S 200 145 S 210 S 220 Collections on amounts receivable arch
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
Kayok Co budgeted the following cash receipts (excluding cash receipts from loans received) oand cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. January February March Cash Receipts $516,000 409, 500 481,000 Cash paynents $457, 300 350, 800 S28,000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $30,000 at each month-end. In return, the bank hes agreed that the company can borrow up to $150,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan faor the month. The company repays loan principal with any cash in excess of $30,000 on the lest day of each month. The company has a cash bolance of $30,000 and a loan balance of $60,000 at January 1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus…
For May, Young Company has budgeted its cash receipts at P125,000 and its cash disbursements at P138,000. The company's cash balance on May 1 is P17,000. If the desired May 31 cash balance is P20,000, then how much cash must the company borrow during the month (before considering any interest payments)? * P16,000 P4,000 P8,000 P12,000
Western Company is preparing a cash budget for June. The company has $10,300 in cash at the beginning of June and anticipates $31,700 in cash receipts and $37,900 in cash payments during June. Western Company has an agreement with its bank to maintain a minimum cash balance of $10,000. As of May 31, the company has no loans outstanding. To maintain the $10,000 required balance, during June the company must: Multiple Choice Repay $4,100. Borrow $10,000. Borrow $5,900. Borrow $6,200. Repay $5,900.