Build a cash budget for 2020 See template 3 Refer to your textbook a. Use the receipts from template 2 on Chapter 443 Assume cost of sales, expenses, and taxes are paid c. 100% each quarter. According to the only loan agreement the company has, the cash balance must be maintained at $30,000. If the balance falls below $30,000, a line of credit is available d. on a short-term basis. le. Ignore interest calculations 1. Calculate the Cash Budget for 2020 1st Quarter Sales collected from December, 2019 24890 30% of 1st quarter sales 8520 33410 2nd Quarter 70% of 1st quarter sales 30% of 2nd quarter sales 19880 10455 30335 3rd Quarter 70% of 2nd Quarter Sales 24395 30% of 3rd quarter sales 9000 33395 4th Quarter 70% of 3rd Quarter Sales 21000 30% of 4th quarter sales 12834 33834 TABLE 4.3 Inflows and Outflows of Cash Inflows (sources) Outflows (uses) Decrease in any asset Increase in any asset Increase in any liability Decrease in any liability Net profits after taxes Net loss after taxes Depreciation and other Dividends paid noncash charges Sale of stock Repurchase or retirement of stock Cash Budget 2020 Quarter First Second Third Fourth Total Beginning Cash Balano $ 8.185.00 Add: Cash Receipts Cash Available Less Payments Balance before borrowing Borrowing/(repayment) Ending cash balance Now you have a budgeted income statement, cash receipts budget and a cash budget, you can determine if you have any opportunities for expansion. If management decided to purchase some equipment for $75,000, what obstacles could they be facing? What are some of the options the company has for financing the equipment. The company's credit rating is perfect. The company has never borrowed money, so what information should the company be prepared to furnish if they decide to borrow? Build a cash budget for 2020 See template 3 Refer to your textbook a. Use the receipts from template 2 on Chapter 443 Assume cost of sales, expenses, and taxes are paid c. 100% each quarter. According to the only loan agreement the company has, the cash balance must be maintained at $30,000. If the balance falls below $30,000, a line of credit is available d. on a short-term basis. le. Ignore interest calculations 1. Calculate the Cash Budget for 2020 1st Quarter Sales collected from December, 2019 24890 30% of 1st quarter sales 8520 33410 2nd Quarter 70% of 1st quarter sales 30% of 2nd quarter sales 19880 10455 30335 3rd Quarter 70% of 2nd Quarter Sales 24395 30% of 3rd quarter sales 9000 33395 4th Quarter 70% of 3rd Quarter Sales 21000 30% of 4th quarter sales 12834 33834 TABLE 4.3 Inflows and Outflows of Cash Inflows (sources) Outflows (uses) Decrease in any asset Increase in any asset Increase in any liability Decrease in any liability Net profits after taxes Net loss after taxes Depreciation and other Dividends paid noncash charges Sale of stock Repurchase or retirement of stock Cash Budget 2020 Quarter First Second Third Fourth Total Beginning Cash Balano $ 8.185.00 Add: Cash Receipts Cash Available Less Payments Balance before borrowing Borrowing/(repayment) Ending cash balance Now you have a budgeted income statement, cash receipts budget and a cash budget, you can determine if you have any opportunities for expansion. If management decided to purchase some equipment for $75,000, what obstacles could they be facing? What are some of the options the company has for financing the equipment. The company's credit rating is perfect. The company has never borrowed money, so what information should the company be prepared to furnish if they decide to borrow
