PROBLEM 2-24 Cash Budget with Supporting Schedules [L02, LO4 LOY, LOB] The president of Univers, Inc., has jet approached the company's hank seeking short term finne- ing for the coming year, Year 2. Unnex is a distributor of commercial vacuum cleaners. The bank has stated that the kain request must be accompanied by a detailed cash budges that shows the quander in which financing will be ceeded, as well as the amounts that will be needed and the quarters in which repayments can be marks To provide this information for the bank, the president has directed that the following data be gathered from which a cash budget can be prepares: a. Budgeted sales and merchandise purchases for Year 2. as well as somal sales and purchases For the last quarter of Year l. the ne follows: A B C C 1 Merchandise 2 Purchases 3 Your 1: Fourth quarter actual 1900,600 $180 00D First quarter estimated 1400.030 3260 405 Second quarter esi males $502,030 1310 105 Third quarter callmated 1800,030 9370 005 Fourth quarter estimated 1480,030 1240 40D 10 b. The company typically calpers 17 of a quarter's sales before the quarter ends and another 6545 In the following quarter. The remainder is uncollectible. This pallizn of collections is now being experienced in the actuel data for the Year 1 fourth quarter. C. Some 205 of a quarter's merchandise purchases are paid for within the quarter. The remela- dor is paid in the following quarter. d. Selling o'd administrative expenses for Year 2 are budgeted at $90,000 per quarter plus 123 of sales. Of the fixed amount, $20/040 cach quarter is depreciation. The company will pay $10,00 in creh dividends each quarter. If. Land purchases will be made as follows during the year: $80.000 in the second quarter and $48.500 in the third quarter. The Cash account contained $20,C00 at the end of Year 1. The company must maintain a mini- mum cash balance of al leant $18009 It. The company has an agreement with a local bank that allows the company to bunow in insure- ments of $10,000 at the beginning of each quarter. up to a total bean balance of $100 000. The imerest cale on these loans is 15 per month, and for simplicity, we will assome thet interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest of the end of the year. L At present, the company has no loans outstanding. Required 1. Prepare the following, by quarter and in total, for Year 2: a. A schoduke of expeeked chech collections on Maki. A schedule of expected cash disbursements for merchandise purchases. 2, Compute the expected cash disbursements for selling and administrative expenses, by quarter and in total, for Year 1 1. Prepare a cash budget by quarter and in total for Year 2