Don Beecher, chief financial officer of Carvel Wireless, is responsible for the companys budgeting process. Beechers staff
Question:
Requirements
1. Prepare the Carvel Wireless cash budget for 2011. Date the budget simply 2011 and denote the beginning and ending cash balances as beginning and ending. Assume the company expects 2011 to be the same as 2010, but with the following changes:
a. In 2011, the company expects a 14% increase in collections from customers and a 25% increase in purchases of inventory.
b. There will be no sales of investments in 2011.
c. Carvel plans to issue no stock in 2011.
d. Carvel plans to end the year with a cash balance of $3,550.
2. Does the companys cash budget for 2011 suggest that Carvel is growing, holding steady, or decreasing insize?
A cash budget is an estimation of the cash flows for a business over a specific period of time. These cash inflows and outflows include revenues collected, expenses paid, and loans receipts and payment. Its primary purpose is to provide the...
Step by Step Answer:
Financial accounting
ISBN: 978-0136108863
8th Edition
Authors: Walter T. Harrison, Charles T. Horngren, William Bill Thomas