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The president of Univax, Inc., has just approached the company's bank seeking short-term financing for the coming year, Year 2. Univax is a distributor of

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The president of Univax, Inc., has just approached the company's bank seeking short-term financing for the coming year, Year 2. Univax is a distributor of commercial vacuum cleaners. The bank has stated that the loan request must be accompanied by a detailed cash budget that shows the quarters in which financing will be needed, as well as the amounts that will be needed and the quarters in which repayments can be made. To provide this information for the bank, the president has directed that the following data be gathered from which a cash budget can be prepared: a. Budgeted sales and merchandise purchases for Year 2, as well as actual sales and purchases for the last quarter of Year 1, are as follows: Merchandise Pu Year 1 Fourth quarter actual $350,000 $250,000 Year 2 First quarter estimated Second quarter estimated Third quarter estimated Fourth quarter estimated $450,000 $330,000 $550,000 $650,000 $440,000 $530,000 $380,000 $310,000 b. The company typically collects 53% of a quarter's sales before the quarter ends and another 45% in the following quarter. The remainder is uncollectible. This pattern of collections is now being experienced in c Some 10% fa quarter's merchandise purchases are paid for within the quarter. The remainder is paid d. Selling and administrative expenses for Year 2 are budgeted at S84.000 per quarter plus 8% of sales. Of the actual data for the Year 1 fourth quarter in the following quarter the fixed amount, $15,000 each quarter is depreciation. thn purchayes walye an ung the e 00 n the second quarter and $48 500 in t. Land purchases will be made as follows during the year: $96,000 in the second quarter and $48,500 in g. The Cash account contained $36,000 at the end of Year 1. The company must maintain a minimum h. The company has an agreement with a local bank that allows the company to borrow in increments of the third quarter cash balance of at least $34,000 $10,000 at the beginning of each quarter, up to a total loan balance of $100,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the year i. At present, the company has no loans outstanding 0 F1 FS F7 1e as as it is able, repay 18 company would, far l. Al present, the company has no loans outstanding Required ofexpected cash clectors on sales by quarter and in total for Year 2 (Leave no celis blank be certain to enter "0" wherever required. Omit the "$" sign in your response) Schedule of Expected Cash Collections Year 1-Fourth quarter sales Year 2-First quarter sales Year 2-Second quarter sales Year 2-Third quarter sales Year 2-Fourth quarter salers Total cash collections 1b. Prepare a schedule of expected cash disbursements for merchandise purchases, by quarter and in total for Year 2. (Leave no cells blank - be certain to enter "O" wherever required. Omit the "s sign in your response.) Schedule of Expected Cash Disbursements-Merchandise Purchases Year 2 Quarter Year 1-Fourth quarter purchases Year 2-First quanter purchases Year 2- Second quarter purchases Year 2-Third quater purchases Year 2- Fourth quarter purchases Total cash disbursements HTJ

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