Good day may I have the answers to requirement A,B and C in the attached picture Francis and Company has planned a cash budget for the third quarter of 2004. The cashbalance on July 1, 2004 is expected to be an overdraft of $82,000.Extracts from the sales and purchases budgets are as follows:BudgetedSalesBudgetedPurchasesMonthMay$800,000June$900,000$600,000July$750,000$550,000August$650,000$450,000September$800,000$500,000i) All sales are on credit and an analysis of the records shows that debtors settle according tothe following pattern, in accordance with the credit terms 5/30, n90:50% in the month of sale30% in the month following sale 20% the following monthii) All purchases are on credit and past experience shows that 80% are settled in the monthof purchase in order to take advantage of a 10% prompt settlement discount. The balance willbe disbursed in the month after purchase.The credit terms of the suppliers - 10/30, n60.iii) Wages and salaries are expected to be $1,800,000 per annum and are paid monthly.iv) Fixed operating expenses, which accrue evenly throughout the year, are estimated to be$2,400,000 per annum, (including depreciation on fixed assets of $60,000 per month) and issettled monthly.v) Taxation of $80,000 has to be settled in August.vi) The company is expected to receive settlement on an insurance claim of$50,000 in September.vii) Interest on investment in other companies of $25,000 is expected in July 2004.A short-term investment in JMMB Ltd. of $80,000 will be liquidated inviii)September 2004.ix)The business has made arrangements with their bankers for a loan of$250,000. The loan will be disbursed in two tranches:July 1, 2004$150,000November 1, 2004$100,000Required:(a)July to September.Prepare a schedule of expected cash collections for sales for each of the months(b)to September 30, 2004.Prepare a schedule of expected cash disbursements for purchases for the quarter(c)2004, showing the expected receipts and payments for each month.Prepare a cash budget, with a total column, for the quarter ending September 30,

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(a) July to September. Prepare a schedule of expected cash collections for sales for each of the months (b) to September 30, 2004. Prepare a schedule of expected cash disbursements for purchases for the quarter (c) 2004, showing the expected receipts and payments for each month. Prepare a cash budget, with a total column, for the quarter ending September 30,

(a) July to September. Prepare a schedule of expected cash collections for sales for each of the months (b) to September 30, 2004. Prepare a schedule of expected cash disbursements for purchases for the quarter (c) 2004, showing the expected receipts and payments for each month. Prepare a cash budget, with a total column, for the quarter ending September 30,

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 4P

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