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Posted on Jul 07, 2024

Data choosen from Gift Corp. Month Sales Purchases August $4,500,000 $3,900,000 September $3,700,000 $2,300,000 October $1,900,000 $1,000,000 November $1,350,000 $ 870,000 December $1,275,000 $ 745,000

Data choosen from Gift Corp. Month Sales Purchases August $4,500,000 $3,900,000 September $3,700,000 $2,300,000 October $1,900,000 $1,000,000 November $1,350,000 $ 870,000 December $1,275,000 $ 745,000 Additional Data: Please!!!, pay attention to the cash expenses and non-cash expenses, and their implication when computing the Cash Budget: 1. The firm collects 65% of sales for cash; and 35% one month fater based on past history. 2. Interest Income of $75.000 on Marketable Securities will be received in December. 3. The firm will sell a machinery for cash in $625,000 in October 4. The firm pays cash for 40% of its purchases (same month). 5. The firm pays for 60% of its purchases the following month. 6. Salaries and Wages amount to 15% of the preceding months sales 7. Sales commissions paid amount to 10% of the preceding months sales 8. Lease Payments of $325,000 must be made each month 9. A principal and interest payment on an Outstanding loan is due in December of S375,000 10. The firm will pay cash dividends of $250,000 at the end of December. 11. Fixed assets costing $825,000 in cash will be purchased in November. 12. Depreciation expense is expected to be $60,000 each month. 13. The firm has a beginning cash balance in October of $320,000 14. The firm maintains a minimum cash balance of $320,000 each month. Required: Prepare and Evaluate a Cash Budget for the Months of October November, and December based on the information shown below, and determine if the firm would have a required financing (deficit) or excess cash balance (surplus) for each period. Then answer the questions. I. PREPARATION OF CASH BUDGET (Value: 34 points: 53 issues @.6415each) AUGUST SEPT OCTOBER NOVEMBER DECEMBER Data choosen from Gift Corp.: Month Sales Purchases August $4,500,000 $3,900,000 September $3,700,000 $2,300,000 October $1,900,000 $1,000,000 November $1,350,000 $ 870,000 December $1,275,000 $ 745,000 Additional Data: Please!!! , pay attention to the cash expenses and non-cash expenses, and their implication when computing the Cash Budget: 1. The firm collects 65% of sales for cash; and 35% one month later based on past history 2. Interest Income of $75,000 on Marketable Securities will be received in December 3. The firm will sell a machinery for cash in $625,000 in October 4. The firm pays cash for 40% of its purchases (same month). 5. The firm pays for 60% of its purchases the following month. 6. Salaries and Wages amount to 15% of the preceding months sales 7. Sales commissions paid amount to 10% of the preceding months sales 8. Lease Payments of S325,000 must be made each month 9. A principal and interest payment on an Outstanding loan is due in December of $375,000 10. The firm will pay cash dividends of $250,000 at the end of December 11. Fixed assets costing $825,000 in cash will be purchased in November. 12. Depreciation expense is expected to be $60,000 each month. 13. The firm has a beginning cash balance in October of S320,000. 14. The firm maintains a minimum cash balance of S320,000 each month. Required: Prepare and Evaluate a Cash Budget for the Months of October, November, and December based on the information shown below, and determine if the firm would have a required financing (deficit) or excess cash balance (surplus) for each period. Then answer the questions. I. PREPARATION OF CASH BUDGET (Value: 34 points: 53 issues @.6415each) AUGUST SEPT OCTOBER NOVEMBER DECEMBER