3. Cash budget for Year 2 Cash balance, beginning Add collections from sales Total cash available Less disbursements: Merchandise purchases Operating expenses Dividends Land Total disbursements Excess (deficiency) of receipts over disbursements Financing: Borrowings Repayments Interest Total financing Cash balance, ending . UNIVAX, INC. 1a. Schedule of expected cash collections 1b. Schedule of expected cash disbursements for merchandise purchases for Year 2 2. Budgeted selling and administrative expenses for Year 2 PRoBLEM 8-24 Cash Budget with Supporting Schedules [L.02, L.04, L.07, L0B] The president of Uaivax, Ine, has just appronched the compary's bank seeking short-term financing for the coming year, Year 2. Univax is a distributor of commercial vacuum cleaners. The bank has stated that the loan request must be accompanied by a detailed cash budget that shows the quarters in which financing will be needed, as well as the amounts that will be needed and the quaren in which repayments can be made. To provide this information for the bank, the president has directed that the following data be gathered from which a cash budget can be prepared: a. Budigeted sales and merchandise purchases for Year 2, as well as actual sales and purchases for the last quarter of Year 1, are as follows: b. The company typically collects 33% of a quarter's sales before the quarter ends and another - 65% in the following quarter. The remainder is uneollectible. This pattern of collections is now being experienced in the actuit data for the Year I fourth quarter. c. Some 20% of a quarter's merchandise purchases are paid for within the quarter. The remainder is paid in the following qunrter. d. Selling and administrative expenses for Ycar 2 are budgeted at $90,000 per quarter plus 12% of sales. Of the fixod amount, $20,000 cach quarter is depreciation. c. The company will pay $10,000 in cash dividends each quarter. f. Land purchases will be made as follows during the year: $80.000 in the second quarter and $48,500 in the third quarter. g. The Cash account containod $20,000 at the end of Year 1 . The company must maintain a minimum cash bulince of at least $18,000. b. The compaay has an agreement with a local bank that allows the company to borrow in incremeats of $10,000 at the beginning of each quarter, op to a total loan balance of $100,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest. is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the year. i. Ar present, the company has no loans outstanding. Regued: 1. Prepare the following, by quarter and in total, for Year 2: a. A schedute of expected cash collections on sales. b. A schedule of expected cash disburiements for merchandise purchases. 2. Compute the expected casb dishursements for selling and administrative expenses, by quarter and in total, for Year 2. 3. Prepare a cash budget by quarter and in total for Year 2. Given Data P08-24: UNIVAX, INC. Budgeted Sales and Merchandise Purchases