Question
John Wills, Swifty & Hill Fabricators’ budget director, has received budget information from several managers and...
John Wills, Swifty & Hill Fabricators’ budget director, has received budget information from several managers and is preparing the company’s cash budget.
| January | February | March | Quarter | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Collections from sales | 303,405 | 550,875 | 587,100 | 1,441,380 | ||||||||
| Payments for direct materials | 45,470 | 67,800 | 80,180 | 193,450 | ||||||||
| Payments for direct labor | 125,430 | 215,830 | 190,970 | 532,230 | ||||||||
| Payments for manufacturing overheads | 97,615 | 100,779 | 99,909 | 298,303 | ||||||||
| Payments for Selling & administrative expenses | 58,195 | 74,300 | 70,910 | 203,405 | ||||||||
In addition to the information he received from these managers, John knows the following:
| ● | Bates & Hill plans to have $67,800 in its cash account on January 1. | |
| ● | Bates & Hill plans to declare and pay dividends totaling $55,300 in January. | |
| ● | Bates & Hill plans to purchase and pay cash for a piece of land in February at a cost of $81,360. | |
| ● | Bates & Hill plans to make a cash purchase of equipment in March at a cost of $67,800. | |
| ● | Bates & Hill’s income taxes from last quarter totaling $85,040 will be paid in January. | |
| ● | Bates & Hill is required to maintain a minimum cash balance of $33,900 in its account at First National Bank. |
Swifty & Hill has negotiated with the First National Bank to provide a $198,000 line of credit that can be borrowed against in $1,000 increments on the first day of the month. Any repayments on the line of credit must also be made in $1,000 increments and are made on the last day of the month when cash is available. The annual interest rate on this line of credit is 14%. Any time a principal payment is made, all accrued interest to date is repaid. Prepare Swifty & Hill’s cash budget for the first quarter
Answers
Cash budget for the First Quarter January February March Quarter Cash Receipts Opening Balance 67800 195 11001 Collections from sales 3,03,405 5,50,875 5,87,100 1441380 Borrowing from Bank 11000 Total Cash receipts 382205 551070 598101 1441380 Cash payments Dividends 55300 55300 Payments for direct materials 45,470 67,800 80,180 193450 Payments for direct labor 1,25,430 2,15,830 1,90,970 532230 Payments for manufacturing overheads 97,615 1,00,779 99,909 298303 Payments for Selling & administrative expenses 58,195 74,300 70,910 203405 Purchase of Land 81360 81360 Purchase of Equipment 67800 67800 Repayment of Borrowing 11000 11000 Repayment of Interest on Borrowing 385 385 Note 1 Total Cash payments 382010 540069 521154 1443233 Cash balance - Excess / ( Deficit ) 195 11001 87948 86095
Note 1 - Calculation of Interest on Borrowing There was a shortfall of $ 10805 at the end of January Since the Borrowing can be done in the Intervals of $ 1000 each, the Company borrowed $ 11000 in January The Company had $ 11000 at the end of February but as required in the question the Company has to pay the Interest also , alongwith the Principal in the same month but the Company did not have enough funds to pay the principal , as well as Interest The repayment could be possible in March only Moreover, the Interest shall be paid on the Limit Utilized . As per the condition the borrowing can be done at the beginning of the month , Hence 3 months Interest to be charged Hence, the Interest @ 14% per annum shall be charged on 11000 for 3 months Interest on Loan = 11000* 14% * 3/12 = 385
Similar Solved Questions
1 answers
Using your own words define the following concepts; e p-value. . Hypothesis. . Acceptance region. ....
Using your own words define the following concepts; e p-value. . Hypothesis. . Acceptance region. . Type I error . Type II error....
1 answers
1. Gravetter/Wallnau/ Forzano, Essentials ChapterS Aa Aa Find the z-score corresponding to x = 24 and...
1. Gravetter/Wallnau/ Forzano, Essentials ChapterS Aa Aa Find the z-score corresponding to x = 24 and the X value corresponding to z = 1.50 for each of the following samples. Type the z-scores to two decimal places M=20 and s = 12 M-20 and s 4 M 30 and s -8 M=30 and s = 10 z= z z...
1 answers
A solid and a liquid are shaken together in a test tube to produce a clear blue liquid. Which of the following best describes the behavior of the above pair of substances? soluble insoluble miscible immiscible
A solid and a liquid are shaken together in a test tube to produce a clear blue liquid. Which of the following best describes the behavior of the above pair of substances? soluble insoluble miscible immiscible...
1 answers
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park...
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $4.5 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities...
1 answers
QUESTION 16 Leo Tech Inc. just paid a dividend of $13 to its stockholders. The dividend...
QUESTION 16 Leo Tech Inc. just paid a dividend of $13 to its stockholders. The dividend will grow at 8% over the next 6 years. After 6 years, the dividends will remain constant forever. If the discount rate is 5%, what is the value of Leo Tech's stock today? (7 points)...
1 answers
An individual invested £106.40 in the stock market and the value of his in- vestment two...
An individual invested £106.40 in the stock market and the value of his in- vestment two years later is £138.22. What are the simple and continuously compounded returns on his investment?...
1 answers
Double-Major Co. has a cost of equity of 11.7 percent and an aftertax cost of debt...
Double-Major Co. has a cost of equity of 11.7 percent and an aftertax cost of debt of 4.47 percent. The company's balance sheet lists long- term debt of $345,000 and equity of $605,000. The company's bonds sell for 104.3 percent of par and market-to-book ratio is 2.83 times. If the company&#...
1 answers
-/5 POINTS MINTROSTAT9 7.E.521.XP. MY NOTES ASK YOUR TEACHER A simple random sample of 100 postal...
-/5 POINTS MINTROSTAT9 7.E.521.XP. MY NOTES ASK YOUR TEACHER A simple random sample of 100 postal employees is used to test if the average time postal employees have worked for the postal service has changed from the value of 7.5 years recorded 20 years ago. The sample mean was 7 years with a standa...
1 answers
Need help with this practice question Students were surveyed on the number of visits to a...
Need help with this practice question Students were surveyed on the number of visits to a Marc's Milk convenience store (often, occasional, or never) and if the store was conveniently located to their school yes or no). (Round the final answers to 1 decimal place.) Visits often Occasional Ne...
1 answers
I had cards to write, i wrote 1 third of cards on monday, 2 eighths on tuesday, 1 sixth on wednesday and wrote the remaining 27 cards on thursday
i had cards to write, i wrote 1 third of cards on monday, 2 eighths on tuesday, 1 sixth on wednesday and wrote the remaining 27 cards on thursday. how many cards did i write?...
1 answers
Introduction of health behavior.. Rni hesute ens that you ma
introduction of health behavior.. Rni hesute ens that you ma...
1 answers
How is the concentration of electrolyte charges measured? a. In millijoules b. By mass c. By...
How is the concentration of electrolyte charges measured? a. In millijoules b. By mass c. By amperes d. By weight e. In milliequivalents 12. What organ retains or releases body fluids, thereby regulating blood volume and blood pressure?...
1 answers
What is the distance between the moon's surface and the earth's surface?
What is the distance between the moon's surface and the earth's surface?...
1 answers
Do journal entries for april and may, and show work on how to do calculations Exam...
Do journal entries for april and may, and show work on how to do calculations Exam Review (Journal Entries) Sept 1 Kim Kardashian opens a merchandising store D-A-S-H by contibuting $100,000 in cash, $50,000 in equipment and a building costing $300,000. Sept 2 Purchase merchandise for $40.000 from K...
1 answers
In reflecting on protocols for best practice, what is a protocol in your practice area that...
In reflecting on protocols for best practice, what is a protocol in your practice area that denotes or represents best practice? In regard to an identified perception for providers, "patient safety" was pinpointed. From your point of view, what is a provider's role in patient safety?...
1 answers
Consider the following reaction NaOEt EtOH a) Identify the mechanism(s) by which the reaction will occur....
Consider the following reaction NaOEt EtOH a) Identify the mechanism(s) by which the reaction will occur. If there is more than one mechanism that can operate, identify the mechanism that will predominate. Explain your reasoning clearly. b) Predict all possible product(s) that will be formed and ide...
1 answers
At launch, the new rocket became the most powerful rocket in operation. It is capable of...
At launch, the new rocket became the most powerful rocket in operation. It is capable of producing 5 million pounds of thrust (about 2.22 × 107 newtons). At launch, the rocket has a mass of about 1.42 × 106 kg. Estimate the acceleration of the rocket while it is still near the surface of...
1 answers
19) What is the best coefficient of performancg for a heat pump that has a hot...
19) What is the best coefficient of performancg for a heat pump that has a hot reservoir temperature of 50.0°C and a cold reservoir temperature of -20.0°C? a)3.62 6 c 0.28 d) 4,61 1.28 Comes from 15.5 Applications of Thermodynamics: Heat Pumps and Refrigerators...
1 answers
15 A sample of a weak acid was tested with three pH indicators giving the toliowing results Red with Methyl Red Gre...
15 A sample of a weak acid was tested with three pH indicators giving the toliowing results Red with Methyl Red Green with Bromophenol Blue Orange with Methyl Orange Therefore the pH range for this sample is o a 30-6.2 e b.3.0 -4.4 O c 3.5-60 o d. 2.8-4.4 15 A sample of a weak acid was tested with ...