Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

I NEED FULL CALCULATIONS ! ! HOW DO YOU GET THE NUMBERS FOR THE CASH BUDGET. FORMULAS INCLUDED! FULL BREAK DOWN OF THE NUMBERS !

I NEED FULL CALCULATIONS !! HOW DO YOU GET THE NUMBERS FOR THE CASH BUDGET. FORMULAS INCLUDED! FULL BREAK DOWN OF THE NUMBERS ! STEP BY STEP NOT JUST THE ANWSERS.
The board of directors of the Cortez Beach Yacht Club (CBYC) is developing plans to acquire more equipment for lessons and rentals and to expand club facilities. The board plans to purchase about $50,000 of new equipment each year and wants to begin a fund to purchase a $600,000 piece of property for club expansion. : The club manger is concerned about the club's capability to purchase equipment and expand its facilities. One club member has agreed to help prepare the following financial statements and help the manager ascertain whether the plans are realistic. Additional information follows the financial statements.
Additional Information 1. Other financial information as of October 31, year 9: Page 640 a. Cash in checking account, $14,000. b. Petty cash, $600. c. Outstanding mortgage balance, $720,000. d. Accounts payable for supplies and utilities unpaid as of October 31, year 9, and due in November, year 9, $5,000.2. The club purchased $50,000 worth of sailing equipment during the current fiscal year (ending October 31, year 9). Cash of $20,000 was paid on delivery, with the balanee due on October 1, which had not been paid as of October 31, year 9.3. The club began operations in year 3 in rental quarters. In October, year 5, it purchased its current property (land and building) for $1,200,000, paying $240,000 down and agreeing to pay $60,000 plus 6 percent interest annually on the previously unpaid loan balance each November 1, starting November 1, year 6.4. Membership rose 3 percent during year 9, approximately the same annual rate of increase the club has experienced since it opened and that is expected to continue in the future. 5. Membership fees were increased by 15 percent in year 9. The board has tentative plans to increase them by 10 percent in year 10.6. Lesson and class fees have not been increased for three years. The number of classes and lessons has grown significantly each year; the percentage growth exporienced in year 9 is expected to be repeated in year 10.7. Miscellaneous revenues are expected to grow in year 10(over year 9) at the same percentage as experienced in year 9(over year 8).8. Lesson and class employees' wages and benefits will increase to $604,650. The wages and benefits of regular employees and the manager will increase 15 percent. Equipment depreciation and supplies, utilities, and miscellaneous expenses are expected to increase 25 percent. Required a. Construct a cash budget for year 10 for Cortez Beach Yacht Club. b. Identify any operating problem (s) that this budget discloses for CBYC. Explain your answer. c. Is the manager's concern that the board's goals are unrealistic justified? Explain your answer.
Please show the formulas used to calculate the cash budget FULL DETAILS
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson

6th edition

978-0077400163

Students also viewed these Accounting questions

Question

What are the purposes of promotion ?

Answered: 1 week ago