Carefully study the following cash budget and determine the amount to be borrowed or repaid during each quarter, so that the company never ends a quarter with less than $50,000 cash on hand, and always repays as much debt as possible. There is no debt as of the beginning of the first quarter, and interest costs are assumed not significant in this analysis. Use the pick lists associated with the boxed areas near the bottom of the spreadsheet to determine the right amounts to borrow and repay each quarter. Correct choices will result in the boxed areas turning green. Cash budget Beginning cash Customer receipts Available cash Less: disbursements Direct materials Direct labor Factory overhead SG&A Other expense and tax Equipment purchases Total disbursements Cash surplus (deficit) Financing: Planned borrowing Planned repayment Ending cash balance First Quarter 10,000 150,000 140,000 28,000 13,500 14,000 11,000 0 31,000 97,500 0 52,500 52,500 0 Second Quarter 52,500 160,000 212,500 30,000 16,000 14,000 31,000 12,000 0 250,000 353,000 -140,500 200,000 59,500 Third Quarter 59,500 200,000 259,500 41,000 20,000 15,000 33,000 13,000 0 122,000 137,500 -75,000 62,500 0 Fourth Quarter 62,500 250,000 312,500 48,000 25,000 17,000 33,000 15,000 0 225,000 363,000 -50,500 125,000 74,500
Carefully study the following cash budget and determine the amount to be borrowed or repaid during each quarter, so that the company never ends a quarter with less than $50,000 cash on hand, and always repays as much debt as possible. There is no debt as of the beginning of the first quarter, and interest costs are assumed not significant in this analysis. Use the pick lists associated with the boxed areas near the bottom of the spreadsheet to determine the right amounts to borrow and repay each quarter. Correct choices will result in the boxed areas turning green. Cash budget Beginning cash Customer receipts Available cash Less: disbursements Direct materials Direct labor Factory overhead SG&A Other expense and tax Equipment purchases Total disbursements Cash surplus (deficit) Financing: Planned borrowing Planned repayment Ending cash balance First Quarter 10,000 150,000 140,000 28,000 13,500 14,000 11,000 0 31,000 97,500 0 52,500 52,500 0 Second Quarter 52,500 160,000 212,500 30,000 16,000 14,000 31,000 12,000 0 250,000 353,000 -140,500 200,000 59,500 Third Quarter 59,500 200,000 259,500 41,000 20,000 15,000 33,000 13,000 0 122,000 137,500 -75,000 62,500 0 Fourth Quarter 62,500 250,000 312,500 48,000 25,000 17,000 33,000 15,000 0 225,000 363,000 -50,500 125,000 74,500
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 4P
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Carefully study the following cash budget and determine the amount to be borrowed or repaid
during each quarter, so that the company never ends a quarter with less than $50,000 cash on
hand, and always repays as much debt as possible. There is no debt as of the beginning of the
first quarter, and interest costs are assumed not significant in this analysis.
Use the pick lists associated with the boxed areas near the bottom of the spreadsheet to
determine the right amounts to borrow and repay each quarter. Correct choices will result in
the boxed areas turning green.
Cash budget
Beginning cash
Customer receipts
Available cash
Less: disbursements
Direct materials
Direct labor
Factory overhead
SG&A
Other expense and tax
Equipment purchases
Total disbursements
Cash surplus (deficit)
Financing:
Planned borrowing
Planned repayment
Ending cash balance
First
Quarter
10,000
150,000
140,000
28,000
13,500
14,000
11,000
0
31,000
97,500
0
52,500
52,500
0
Second
Quarter
52,500
160,000
212,500
30,000
16,000
14,000
31,000
12,000
0
250,000
353,000
-140,500
200,000
59,500
Third
Quarter
59,500
200,000
259,500
41,000
20,000
15,000
33,000
13,000
0
122,000
137,500
-75,000
62,500
0
Fourth
Quarter
62,500
250,000
312,500
48,000
25,000
17,000
33,000
15,000
0
225,000
363,000
-50,500
125,000
74,500
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