Working on 'Cash Is King Master Budgets to Inform a Credit Decision'
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"3: Determine a credit recommendation for Kent Bank, to
lend or not. Be prepared to justify your credit decision."
-10% Little Annin Flagmakers Cash Budget (US$) April May June Quarter Beginning Cash Balance $ 37,745 $ 30,000 $ 30,000 $ 37,745 Add: Receipts Cash collections $240,000 $407,700 $486,000 $1,133,700 Total Cash Available $277,745 $ 437,700 $516,000 $1,171,445 Less disbursements Direct materials $110,216 138,264 $117,180 $ 365,660 Direct labor $ 58,400 97,200 $ 52,200 $ 207,800 Manufacturing overhead $ 52,550 62,250 $ 51,000 $ 165,800 Selling and administrative $ 55,813 59,750 $ 56,375 $ 171,938 Dividends 15,000 15.000 15,000 45,000 Equipment purchases 47.820 154,600 202,420 Total Disbursements $291,979 $420,284 $446,355 1,158,618 Excess (deficiency) of cash available $ (14,234) $ 17,416 $ 69,645 $ 12,828 Financing Borrowing $ 31,650 $ 31,650 Repayments $ 31,650 31,650 Interest $ 1,266 1,266 Total Financing $ 32,071 $ 32,493 $ (32,915) $ 32,915 Ending Cash Balance $ 17,416 $ 17,416 $ 36,730 $ 36,730-2% Little Annin Flagmakers Cash Budget (US$) April May June Quarter Beginning Cash Balance $ 37,745 $ 30,000 $ 30,000 $ 37,745 Add: Receipts Cash collections $249,600 $443.940 $529,200 $1,222,740 Total Cash Available $287,345 $ 473,940 $559,200 $1,260,485 Less disbursements Direct materials $116,779 153,037 $127,596 $ 397,412 Direct labor $ 64,320 105,840 $ 56,840 $ 227,000 Manufacturing overhead $ 54,030 64,410 $ 52,160 $ 170,600 Selling and administrative $ 56,063 60,350 $ 56,675 $ 173,088 Dividends 15,000 15,000 15,000 45,000 Equipment purchases 47.820 154,600 202,420 Total Disbursements $306,192 $446,457 $462,871 1,215,520 Excess (deficiency) of cash available $ (18,847) $ 27,483 $ 96,329 $ 44,966 Financing Borrowing $ 46,330 $ 46.330 Repayments $ 46,330 46.330 Interest 1,853 1,853 Total Financing $ 46,948 $ 47,565 $ (48,183) 48.183 Ending Cash Balance $ 27,483 $ 27,483 $ 48,146 $ 48,146-5% Little Annin Flagmakers Cash Budget (US$) April May June Quarter Beginning Cash Balance $ 37,745 $ 30,000 $ 30,000 $ 37,745 Add: Receipts Cash collections $246,000 $430,350 $513,000 $1,189,350 Total Cash Available $283,745 $ 460,350 $543,000 $1,227,095 Less disbursements Direct materials $114,318 147,497 $123,690 $ 385,505 Direct labor $ 62,100 $ 102,600 $ 55,100 $ 219,800 Manufacturing overhead $ 53,475 63,600 $ 51,725 $ 168,800 Selling and administrative $ 55,969 60, 125 $ 56,563 $ 172,656 Dividends 15,000 15,000 15,000 45,000 Equipment purchases 47.820 154,600 202,420 Total Disbursements $300,862 $436,642 $456,678 1,194,181 Excess (deficiency) of cash available $ (17,117) $ 23,708 $ 86,323 32,914 Financing Borrowing $ 40,825 $ 40,825 Repayments $ 40,825 40,825 Interest $ 1,633 1,633 Total Financing $ 41,369 $ 41,913 $ (42,458) 42,458 Ending Cash Balance $ 23,708 $ 23,708 $ 43,865 $ 43,865Base Little Annin Flagmakers Cash Budget (US$) April May June Quarter Beginning Cash Balance $ 37,745 $ 30,000 $ 30,000 $ 37,745 Add: Receipts Cash collections $252,000 $453,000 $540,000 $1,245,000 Total Cash Available $289,745 $ 483,000 $570,000 $1,282, 745 Less disbursements Direct materials $118,420 156,730 $130,200 $ 405,350 Direct labor $ 65,800 108,000 $ 58,000 $ 231,800 Manufacturing overhead $ 54,400 64,950 $ 52,450 $ 171,800 Selling and administrative $ 56,125 60,500 $ 56,750 $ 173,375 Dividends 15,000 15,000 15,000 45,000 Equipment purchases 47,820 154,600 202,420 Total Disbursements $309,745 $453,000 $467,000 1,229,745 Excess (deficiency) of cash available $ (20,000) $ 30,000 $103,000 $ 53,000 Financing Borrowing $ 50,000 $ 50,000 Repayments $ 50,000 50,000 Interest $ 2,000 2,000 Total Financing $ 50,667 $ 51,333 $ (52,000) 52,000 Ending Cash Balance $ 30,000 $ 30,000 $ 51,000 $ 51,000
