Question
How do you solve for the Cash budget? Davis has an agreement with the bank that allows it to borrow in increments of $1,000 at
How do you solve for the Cash budget?
Davis has an agreement with the bank that allows it to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $11,000 in cash.
| Davis Dry Goods Cash Budget For the Quarter Ending June 30, 2015 | |||
|
| April | May | June |
| Cash Balance, Beginning | 10,000 | ? | ? |
| Add Receipts from Customers (Part 1b) | 321,750 | 400,500 | 517,500 |
| Total Cash Available | 331,750 | ? | ? |
| Less Disbursements: |
|
|
|
| Inventory Purchases (Part 1d) | 195,750 | 256,250 | 251,250 |
| Selling Expenses | 35,000 | 45,000 | 60,000 |
| Salaries and Wages | 22,000 | 22,000 | 22,000 |
| Utilities | 14,000 | 14,000 | 14,000 |
| Miscellaneous | 3,000 | 3,000 | 3,000 |
| Dividends Paid | 11,000 | 0 | 0 |
| Land Purchases | 0 | 25,000 | 0 |
| Total Disbursements | 280,750 | 365,250 | 350,250 |
| Excess (Deficiency) of Receipts Over Disbursements | (51,000) | ? | ? |
| Financing: |
|
|
|
| Net Cash from Borrowings | ? | ? | 0 |
| Repayments* | 0 | 0 | ? |
| Interests | 0 | 0 | ? |
| Total Financing | ? | ? | ? |
| Cash Balance, Ending | ? | ? | ? |
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Database Audit And Protection
Authors: Gerardus Blokdyk
3rd Edition
0655407499, 978-0655407492
