Question
Assume actual cash receipts and disbursements will follow the pattern below: (Note: Receivables and Payables of 12/31/x1 will have a cash impact in 20x2.) 1.
Assume actual cash receipts and disbursements will follow the pattern below: (Note: Receivables and | |||||||||
Payables of 12/31/x1 will have a cash impact in 20x2.) | |||||||||
1. 18.00% of sales for the year are made in November and December. Since our customers have 60 day terms | |||||||||
those funds will be collected be collected in January and February. | |||||||||
2. 86.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February. | |||||||||
3. All other manufacturing and operating costs are paid for when incurred. | |||||||||
4. The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses. | |||||||||
5. Minimum Cash Balance needed for 20x2, $185,000 . | |||||||||
Beginning Cash Balance |
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| $ 34,710.000 | ||||
Cash Inflows: |
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Sales Collections: |
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Account Receivable (Sales last year not collected) |
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| $ 67,500.00 | ||||
Sales made and collected in 20x2 |
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| $ 1,086,500.00 | ||||
Cash Available |
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| $ 1,188,710.00 | ||||
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Cash Outflows: |
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Purchases |
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Accounts Payable (Purchases last year) |
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| $ 54,000.000 | ||||
Purchases made and paid for in 20x2 |
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| $ 354,337.20 | ||||
Other Manufacturing Costs |
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Direct Labor |
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| $ 51,240.000 | ||||
Total Manufacturing Overhead |
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| $ 341,484.000 | ||||
Selling and Administrative |
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| $ 207,250.000 | ||||
Less: Depreciation |
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| $ 21,900.00 | |||||
Total Cash Outflows |
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| $ 986,411.20 | ||||
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Budgeted Cash Balance before financing |
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| $ 202,298.80 | ||||
Needed Minimum Balance |
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| $ 185,000.000 | ||||
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Amount to be borrowed (if any) |
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| $ - | ||||
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Budgeted Cash Balance |
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| $ 202,298.80 | ||||
The number I have in bold are incorrect. Please assist. Thank you! |
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