cash budget

B 28 29 Red Dragon Company has a expected January 1, 2020 cash balance of $130,000 and a minimum ending cash 30 balance of $10,000 in each quarter. To ensure they maintain the desired cash balance, Red Dragon set up a 31 line of credit with their bank at 12% per year with interest only payable at the point of repayment. Assume 32 loans, which have to be at increments of $1,000, can only be taken at the start of a quarter and repaid at the 33 end of a quarter 34 a. Prepare a Schedule of Expected Collections for the year by quarter (3 marks) 35 36 Red Dragon Company 37 Schedule of Expected Collections 28 For the Year Ending December 31, 2020 2 Expected Sales Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Total Collections 43 44 45 46 Tatal Collections 47 48 49 50 Worldng Space 51 52 3 4 5 b. Calculate the December 31, 2020 Accounts Receivable balance. (1 mark) December 31, 2020 Accounts Receivable Working Space ANWSER 92 c. Prepare a Schedule of Expected Disbursements for the year by quarter (6 marks) 93 94 Red Dragon Company 95 Schedule of Expected Disbursements 96 For the Year Ending December 31, 2020 97 98 Purchases Quarter 1 Quarter 2 Quarter 3 99 100 Direct Materials 101 102 103 104 Quarter 4 Total 05 06 07 8 9 Total Collections III Cover Page Formula Sheet Multiple Choice Cash Budget CVP. Seg Report & Iner Analysis Flex Bug ulation Mode: Automatic Work Statistin 92 c. Prepare a Schedule of Expected Disbursements for the year by quarter (6 marks) 93 94 Red Dragon Company 95 Schedule of Expected Disbursements 96 For the Year Ending December 31, 2020 97 98 Purchases Quarter 1 Quarter 2 Quarter 3 99 20 Direct Materials 1 2 Quarter 4 Total Total Collections Cover Page Formula Sheet Multiple Choice Cash Budget CVP. Seg Report & Ince Analysis Flex Buc Son Mode: Automatic Workbook Statistics Chp Red Dragon company Cash Budget For the Year Ending December 31, 2020 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total 124 125 126 127 128 129 Beginning cash balance 30 Add: Cash receipts 31 32 33 Total receipts 4 Total available cash 5 Less: Disbursements 5 Total disbursements Excess cash available over disbursements 5 HTML 144 145 146 747 Tatal financing 148 Ending cash balance 149 150 Interest on Loan repayment 151 152 753 54 55 56 57 8 3 ANWSER ANWSER ANWSER ANWSER Working Space 1 5 6 7 8 Red Dragon Company is a manufacturer of outdoor furniture and would like to get a better understanding of their cash budget. They have provided you with information about their collections and spending with a request you prepare a cash budget. Here is the expected sales by quarter for 2020: 9 Quarter 1 Quarter2 Quarter 3 Quarter 4 10 600,000 1,600,000 800,000 1,000,000 11 12 Red Dragon Company has 100% of their sales on credit, with 60% collected in the quarter of the sale and 40% 13 collected in the quarter after the original sale. Accounts Receivable for January 1 is $200,000 and will be 14 collected during the first quarter. 15 + 16 Red Dragon Company makes all material purchases on credit paying 80% in the quarter of purchase and 20% 17 in the quarter after purchase. The Accounts Payable for January 1 is $80,000 and is paid in the first quarter. In 18 addition Red Dragon will pay dividends to their shareholders of $40,000 in the second quarter and $80,000 in 9 the third quarter as well as expected equipment purchases of $650,000 in the third quarter. Flex Budget & Resp Acco Cash Budget CVP. Seg Report & Ince Analysis >= age Multiple Choice Formula Sheet Workbook Statistics Iculation Mode: Automatic 21 In the quarter after purchase. The Accounts Payable for lanuary 11 580,000 and is uid in the 1 addition Red Dragon will pay dividends to their shareholders of $40,000 in the second quartet d. 19 the third quarter as well as expected equipment purchases of $650,000 in the third quarter 20 Quarter 1 Quarter2 Quarter 3 Quarter Budget Material 250,000 295.000 217,500 217,500 22 Purchases 23 Budget Direct Labour 126,000 192,000 132,000 156,000 Budget Manufacturin g Overhead 80,750 89,000 81,500 80,750 25 Budget Selling & Admir 110,000 160,000 120,000 130,000 100,000 26 Budget Income Tax 57,000 270,000 100,000 27 24 28 29 Red Dragon Company has a expected January 1, 2020 cash balance of $130,000 and a minimum ending cash 30 balance of $10,000 in each quarter. To ensure they maintain the desired cash balance, Red Dragon set up a line of credit with their bank at 12% per year with interest only payable at the point of repayment. Assume 32 loans, which have to be at increments of $1,000, can only be taken at the start of a quarter and repaid at the 31 Flex. Bu