Complete the cash budget for Fine Car Importers by evaluating the cash inflows and disbursements and

enter in your final balances into the empty cells in the tables below.

$$ Comment on sources of financing that the company could access to cover any quarters where there are

cash deficits.

Fine Car Importers specializes in the importation of luxury automobiles into the United States and receives all its

income from sales. All figures are in millions of USD.

$$ Quarterly sales estimates are: Q$1=500,$ Q$2=600,$ Q$3=650,$ Q$4=800,$ and Q$1$ next year $=550$

$$ Accounts receivable $($A$/$R$)$

o Beginning A$/$R balance $=250$

o Average A$/$R collection period $=30$ days

$$ Accounts payable $($A$/$P$)$

o Purchases $=50\%$ of next quarter$$s sales

o Beginning A$/$P $=125$

o A$/$P period $=45$ days

$$ Other expenses

o Wages, taxes and other expenses are $35\%$ of quarterly sales

o Interest and dividend payments are $$100$ per year, payable at $$25$ quarterly

o A major capital expenditure of $$500$ is expected in the second quarter

$$ The initial cash balance is $$400$ and the company maintains a minimum balance of $$100$

REQUIRED

The cash inflows are provided in the table below, along with some information for payment of accounts. Complete

the cash budget for Fine Car Importers by evaluating the cash inflows and cash disbursements and enter in your

final balances into the empty cells in the tables below.

Cash Collections

Q$1$ Q$2$ Q$3$ Q$4$

Beginning Receivables $250167200217$

Sales $500600650800$

Cash Collections $583567633750$

Ending Receivables $167200217267$

$0976$ Financial Management

ANS:

Cash Disbursements

Q$1$ Q$2$ Q$3$ Q$4$

Payment of accounts

Wages, taxes and other expenses

Capital expenditures

Interest and dividend payments

Total cash disbursements

Cash Budget $-$ Net cash flow and cash balance

Q$1$ Q$2$ Q$3$ Q$4$

Total cash collections $583567633750$

Total cash disbursements

Net cash inflow

Beginning Cash Balance

Net cash inflow

Ending cash balance

Minimum cash balance