Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have been assgned the task of putting together a statement for the Deer Company that shows its expected inflows and outflows of cash over

You have been assgned the task of putting together a statement for the Deer Company that shows its expected inflows and outflows of cash over the months of July 2020 through December 2020. The following data has been given to you so that a cash budget can be prepared.
Expected gross sales for May through December are listed below as well as the miscellaneous expenditures during the months July through December:
Month Sales Miscellaneous Expenditures
May $360,000
June $200,000
July $300,000 $15,000
August $455,000 $30,000
September $600,000 $25,000
October $550,000 $30,000
November $400,000 $35,000
December $700,000 $50,000
12% of the sales in any given month are collected during that month. However, the firm has a credit policy so factor a 3% discount into the current month's sales collection
70% of the sales in any given month are collected the following month after the sale
20% of the sales in any given month are collected during the second month following the sales
65% of the expected sales during the following month
100% of its current month's raw materials purchases are paid in the following month
5% of the current month's expected sales are paid in wages and salaries on a monthly basis
2% of the current month's expected sales are made in monthly lease payments
3% of sales amounts to the monthly advertising expense
10% of sales are allocated in the months August, September, and October for R&D Expenditures
$30,000 will be paid in December as prepayment for insurance for the following year.
$45,000 will be paid in September for taxes.
$40,000 will be paid in December for taxes
$25,000 is the beginning cash balance in July
$20,000 is the target cash balance each month
Display all values in whole numbers, no decimal places
Deer Company Cash Budget July-December
May June July August September October November December
Forecast sales -------
Cash sales
Lagged 1 month
Lagged 2 months
Total Cash receipts
Raw Materials Purchases
Raw materials payment
Wages and Salaries
Lease payments
Advertising expense
R&D Expenditures
Insurance prepayment
Taxes
Total cash disbursements
Net cash flow
Add: Beginning cash
Ending cash
Less: Minimum cash balance
Required total financing (notes payable)
Excess Cash balance (marketable securities)
Display all values in whole numbers, no decimal places Total
And can you write te working and then put it into the table layoout above

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

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav

13th Edition

8120335643, 136126634, 978-0136126638

More Books

Students also viewed these Accounting questions