Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The accountant for Zacharys Dress Shop prepared the following cash budget. Zacharys desires to maintain a cash cushion of $23,000 at the end of each

The accountant for Zacharys Dress Shop prepared the following cash budget. Zacharys desires to maintain a cash cushion of $23,000 at the end of each month. Funds are assumed to be borrowed and repaid on the last day of each month. Interest is charged at the rate of 3 percent per month.

Required

  1. Complete the cash budget by filling in the missing amounts.

  2. Cash Budget July August September
    Section 1: Cash receipts
    Beginning cash balance $52,000
    Add cash receipts 199,000 219,000 259,600
    Total cash available 251,000
    Section 2: Cash payments
    For inventory purchases 175,026 149,730 183,652
    For S&A expenses 64,000 70,060 70,932
    For interest expense 0
    Total budgeted disbursements 239,026
    Section 3: Financing activities
    Surplus (shortage) 11,974
    Borrowing (repayments) 11,026
    Ending cash balance $23,000 $23,000 $23,000

  3. Determine the amount of net cash flows from operating activities Zacharys will report on the third quarter pro forma statement of cash flows.

  4. Determine the amount of net cash flows from financing activities Zacharys will report on the third quarter pro forma statement of cash flows.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Computerized Accounting With Quickbooks 2018

Authors: James B. Rosa, Kathleen Villani

1st Edition

0763882674, 9780763882679

Students also viewed these Accounting questions