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James Buchanan Orthotics and Prosthetics is planning to request a line of credit from its bank. The company has produced sales estimates, and these appear
| James Buchanan Orthotics and Prosthetics is planning to request a line of credit from its bank. | ||||||||||||||
| The company has produced sales estimates, and these appear in the worksheet below. Collection | ||||||||||||||
| estimates are as follows: 10 percent within the month of sale, 75 percent in the month following | ||||||||||||||
| the sale, and 15 percent in the second month following the sale. Labor and supplies estimates also | ||||||||||||||
| appear in the worksheet below. Payments for labor and supplies are typically made during the | ||||||||||||||
| month following the one in which these costs have been incurred. General and administrative | ||||||||||||||
| salaries will amount to approximately $27,000 a month; lease payments under long-term lease | ||||||||||||||
| contracts will be $9,000 a month; depreciation charges will be $36,000 a month; miscellaneous | ||||||||||||||
| expenses will be $2,700 a month; income tax payments of $63,000 will be due in both September | ||||||||||||||
| and December; and a progress payment of $180,000 on a new building must be paid in October. | ||||||||||||||
| Cash on hand on July 1 will amount to $132,000, and a minimum cash balance of $90,000 will be | ||||||||||||||
| maintained throughout the cash budget period. What loan will be the company require in | ||||||||||||||
| October? | ||||||||||||||
| ANSWER THE FOLLOWING: Please display work | ||||||||||||||
| May | June | July | August | September | October | November | December | January | ||||||
| Collections worksheet: | ||||||||||||||
| 1. | Billed charges | $180,000 | $180,000 | $360,000 | $540,000 | $720,000 | $360,000 | $360,000 | $90,000 | $180,000 | ||||
| 2. | Collections | |||||||||||||
| Within 30 days | ? | ? | ? | ? | ? | ? | ? | ? | ? | |||||
| 30-60 days | $0 | ? | ? | ? | ? | ? | ? | ? | ? | |||||
| 60-90 days | $0 | $0 | ? | ? | ? | ? | ? | ? | ? | |||||
| 3. | Total collections | ? | ? | ? | ? | ? | ? | ? | ? | ? | ||||
| Supplies worksheet: | ||||||||||||||
| 4. | Amount of labor and supplies | $90,000 | $90,000 | $126,000 | $882,000 | $306,000 | $234,000 | $162,000 | $90,000 | |||||
| 5. | Payments made for labor and supplies | $0 | ? | ? | ? | ? | ? | ? | ? | ? | ||||
| Net cash gain (loss): | ||||||||||||||
| 6. | Total collections (line 3) | ? | ? | ? | ? | ? | ? | ? | ? | ? | ||||
| 7. | Total purchases (line 5) | $0 | ? | ? | ? | ? | ? | ? | ? | ? | ||||
| 8. | General and administrative salaries | -$27,000 | -$27,000 | -$27,000 | -$27,000 | -$27,000 | -$27,000 | -$27,000 | -$27,000 | -$27,000 | ||||
| 9. | Lease payments | -$9,000 | -$9,000 | -$9,000 | -$9,000 | -$9,000 | -$9,000 | -$9,000 | -$9,000 | -$9,000 | ||||
| 10. | Miscellaneous expenses | -$2,700 | -$2,700 | -$2,700 | -$2,700 | -$2,700 | -$2,700 | -$2,700 | -$2,700 | -$2,700 | ||||
| 11. | Taxes | -$63,000 | -$63,000 | |||||||||||
| 12. | Progress payment | -$180,000 | ||||||||||||
| 13. | Total payments | ? | ? | ? | ? | ? | ? | ? | ? | ? | ||||
| 14. | Net cash gain(or loss) | ? | ? | ? | ? | ? | ? | ? | ? | ? | ||||
| Borrowing/surplus summary: | ||||||||||||||
| 15. | Cash at beginning with no borrowing | $132,000 | ? | ? | ? | ? | ? | ? | ||||||
| 16. | Cash at end with no borrowing (line 14 + 15) | ? | ? | ? | ? | ? | ? | ? | ||||||
| 17. | Target cash balance (given) | $90,000 | $90,000 | $90,000 | $90,000 | $90,000 | $90,000 | $90,000 | ||||||
| 18. | Cumulative surplus cash(or loan balance) | ? | ? | ? | ? | ? | ? | ? | ||||||
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Capital Flows And Foreign Direct Investments In Emerging Markets
Authors: S. MotamenSamadian
1st Edition
1403991545,0230597963
