B D E Question 3: Cash Budget (17 marks) Torch Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows: Required: Expected cash balance on March 1 $ 55,000 February March April Part A. Prepare a schedule of expected cash collections from customers for March and April (3 marks) 350,000 200,000 450,000 Credit Sales (all sales are on account) Month of 50% Month after 50% Lorch Company Schedule of Expected Cash Collections For the two months ended April 30 Collection Pattern from customers for credit sales March April March 300,000 50,000 Description Cash payments for expenses Equipment purchase (in cash) Collection of notes receivable Proceeds from sale of land April 375,000 50,000 30,000 20,000 February March April Cash collected from customers (use in cash budget in part B) 25,000 , 20 21 If Torch Company borrows money, they will pay as much as they can back in the following months. Any borrowings and repayments are done in increments of $1,000. Interest can be ignored. 22 Part B. Using the question data and your response to part a, prepare a cash budget for March and April using columns for each month. Also, include a summary column for the two month period, March 1st - April 30th. (11 marks) 23 24 ***Formulas or cell references must be used to receive marks for all que Torch Company Cash Budget For the two months ended April 30 25 Summary March 1st 26 March April April 30th 27 Cash balance, beg $ 55,000 28 Cash collections: (list alphabetically 29 Cash collected from customers 30 31 32 Total available cash A B D E 33 Less: cash payments (list alphabetically) 34 35 36 Total cash payments 37 Excess (deficiency) 38 Financing: 39 Borrowing 40 Repayments (show as negative) 41 Total Financing Cash balance, ending 42 43 44 45 Part C: (3 marks): (2 marks) 46 What is the accounts receivable balance as at April 30th? 47 (1 mark) 48 How much of the loan is outstanding at April 30th? 49 50 END OF QUESTION 3 51