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:

	Sales	Merchandise Purchases
Year 1:
Fourth quarter actual	$ 600,000	$ 300,000
Year 2:
First quarter estimated	$ 700,000	$ 420,000
Second quarter estimated	$ 750,000	$ 465,000
Third quarter estimated	$ 1,000,000	$ 600,000
Fourth quarter estimated	$ 1,030,000	$ 618,000

b.	The company typically collects 48% of a quarter?s sales before the quarter ends and another 50% in the following quarter. The remainder is uncollectible. This pattern of collections is now being experienced in the actual data for the Year 1 fourth quarter.
c.	Some 20% of a quarter's merchandise purchases are paid for within the quarter. The remainder is paid in the following quarter.
d.	Selling and administrative expenses for Year 2 are budgeted at $205,000 per quarter plus 10% of sales. Of the fixed amount, $60,000 each quarter is depreciation.
e.	The company will pay $40,000 in cash dividends each quarter.
f.	Land purchases will be made as follows during the year: $188,000 in the second quarter and $62,500 in the third quarter.
g.	The Cash account contained $56,000 at the end of Year 1. The company must maintain a minimum cash balance of at least $36,000.
h.	The company has an agreement with a local bank that allows the company to borrow up to a total loan balance of $400,000. 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.

Required:

1a.	Prepare a schedule of expected cash collections on sales by quarter and in total for Year 2. (Leave no cells blank - be certain to enter "0" wherever required.)

Schedule of Expected Cash Collections
	Year 2Quarter
	First	Second	Third	Fourth	Year - Total
Year 1? Fourth quarter sales	$	$	$	$	$
Year 2 ? First quarter sales
Year 2 ? Second quarter sales
Year 2 ? Third quarter sales
Year 2 ? Fourth quarter sales
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 "0" wherever required.)

Schedule of Expected Cash Disbursements?Merchandise Purchases
	Year 2Quarter
	First	Second	Third	Fourth	Year - Total
Year 1? Fourth quarter purchases	$	$	$	$	$
Year 2 ? First quarter purchases
Year 2 ? Second quarter purchases
Year 2 ? Third quarter purchases
Year 2 ? Fourth quarter purchases
Total cash disbursements	$	$	$	$	$

2.	Compute the expected cash disbursements for selling and administrative expenses, by quarter and in total, for Year 2.

	Cash Disbursements
First	$
Second	$
Third	$
Fourth	$
Year	$

3.

Prepare a cash budget by quarter and in total for Year 2. Assume that selling and administrative expenses are paid in the month incurred.(Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Total Financing should be indicated with a minus sign when the company is repaying amounts that were previously borrowed.)

Univax, Inc. Cash Budget
	Year 2 Quarter
	First	Second	Third	Fourth	Year - Total
Cash balance, beginning	$	$	$	$	$
Add collections from sales
Total cash available
Less disbursements:
Merchandise purchases
Selling and administrative expenses
Dividends
Land
Total disbursements
Excess (deficiency) of receipts over disbursements
Financing:
Borrowings
Repayments
Interest
Total financing
Cash balance, ending	$	$	$	$	$

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 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 mad 1a) Prepare a schedule of expected cash collections on sales by quarter and in total for Year 2. Schedule of Expected Cash Collections Particulars Year 1 Fourth quarter sales Year 2 First quarter sales Year 2 Second quarter sales Year 2 Third quarter sales Year 2 Fourth quarter sales Total cash collections Year 2 quarter First Second 300,000 336,000 350,000 360,000 636,000 710,000 Third 375,000 480,000 855,000 Fourth ### 500,000 494,400 994,400 Total 300,000 686,000 735,000 980,000 494,400 3,195,400 1b ) Prepare a schedule of expected cash disbursements for merchandise purchases, by quarter and in total for Year 2 Particulars Year 1 Fourth quarter Purchases Year 2 First quarter Purchases Year 2 Second quarter Purchases Year 2 Third quarter Purchases Year 2 Fourth quarter Purchases Total cash disbursements 2 Year 2 quarter First Second 240,000 92,000 368,000 93,000 332,000 461,000 Third 372,000 120,000 492,000 Fourth ### 480,000 123,600 603,600 Total 240,000 460,000 465,000 600,000 123,600 1,888,600 Compute the expected cash disbursements for selling and administrative expenses, by quarter and in total, for Year 2. Particulars Budgeted sales Variable expense rate Variable expenses Fixed expenses Total Expenses Less Depreciation Cash Disbursements First 700,000 10.00% 70,000 205,000 275,000 (60,000) 215,000 Year 2 quarter Second Third 750,000 1,000,000 10.00% 10.00% 75,000 100,000 ### 205,000 280,000 305,000 ### (60,000) 220,000 245,000 Fourth 1,030,000 10.00% 103,000 ### 308,000 ### 248,000 Total 3,480,000 10.00% 348,000 820,000 1,168,000 (240,000) 928,000 3 Prepare a cash budget by quarter and in total for Year 2. Assume that selling and administrative expenses are paid in the month inc Univax, Inc. Cash Budget Particulars Cash balance, beginning Add collections from sales Total cash available Less disbursements: Merchandise purchases Selling and administrative expenses Dividends Land Total disbursements Excess (deficiency) of receipts over disbursements Financing: Borrowings Repayments Interest Total financing Cash balance, ending Year 2 quarter First Second 56,000 105,000 636,000 710,000 692,000 815,000 Third 36,000 855,000 891,000 Fourth 51,500 994,400 1,045,900 Total 56,000 3,195,400 3,251,400 492,000 245,000 40,000 62,500 839,500 603,600 248,000 ### 587,000 461,000 220,000 ### 188,000 909,000 891,600 1,888,600 928,000 160,000 250,500 3,227,100 105,000 (94,000) 51,500 154,300 24,300 ### 108,500 9,765 118,265 130,000 108,500 9,765 11,735 36,035 36,035 332,000 215,000 40,000 105,000 130,000 ### ### 130,000 36,000 51,500 ax is a et that shows be mad nth incurred