Cash Flow Budgeting ExerciseMayAugSepOctNovDecJan5,000 5.000TotalFebMarAprJunJulOpening BalanceIncomeProduct SalesMerchandisingGovernment grant285,0006,00050,000Total341,000ExpenditureSalariesCasual WagesOffice & Admin120,00010,00036,000ExpensesTravel & transportVenue Hire56,00024,000Total246.000Closing Balance100,000 Student Exercise 2: Cash Flow BudgetThe purpose of this exercise is provide hands-on learning in how to create a Cash Flow Forecastthat predicts the month-end bank balance for every month of the year.In this scenario, you are the manager in a pharmaceutical company ABC. You are required tocomplete a cash flow forecast using the template provided. Your cash flow forecast will predictthe bank balance at the end of each month for every month of the yearThe information you have at your disposal to complete this task is as follows:1. The pharmacy has on its books four (4) major marketing events to run which will take placein March, May, August, and October.2. The total of $285,000 of product sales will be earned in the months that the events are held.The March event will ean $65,000, and the other events in May, August and October will earn$70,000, 85,000 and $65,000 respectively.3. Expenditure on casual salaries, travel and transport, and venue hire will occur only in themonths in which the four events take place. These expenditures will be the same for eachevent.4. Salaries and Office and administration expenses will occur evenly every month5. The company's opening bank balance on 1 January is $5,0006. The company will receive a government grant of $50,000 in July7. The company will make a small income from Merchandising during the months in which thefour events are stagedThe event in March will eam $1,300 merchandising income, and the other events in May, Augustand October will eam $1,600, $1,800 and $1,300 respectively.You are provided with a template below to assist you to complete the exercise.

Cash Budget shows the cash receipts as well as cash payments during the period under review on an…

Answered: Cash Flow Budgeting Exercise Total Jan…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter6: Managing Cash Flow

Section: Chapter Questions

Problem 1EP

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Kindy assist with b & c . Thank you a) The business needs to have a sense of its future cashflows and therfore requires the preparation of the following: A schedule of budgeted cash collections for trade receivables (sales on account) for each of the months October to December. A schedule of expected cash disbursements for accounts payable (purchases on account) for each of the months October to December. A cash budget, with a total column, for the quarter ending December 31, 2021, showing the expected cash receipts and payments for each month and the ending cash balance for each of the three months, given that no financing activities took place. (b) Another team member who is preparing the Budgeted Balance Sheet for the business for the same quarter and has asked you to furnish him with the figures for the expected trade receivables and payables to be included in the statement at December 31, 2021. Is that a reasonable request? If yes, what should these amounts be? c) Upon…
Please assist with parts b & c. Thank you. a) The business needs to have a sense of its future cashflows and therefore requires the preparation of the following: A schedule of budgeted cash collections for the trade receivables (sales on account) for each of the months October to December. A schdule of expected cash disbursements for accounts payable (purchases on account) for each of the months October to December. A cash budget, with a total column, for the quarter ending December 31, 2021, showing the expected cash receipts and payments for each month and the ending cash balance for each of the three months, given that no financing activities took place. (b) Another team member who is preparing the Budgeted Balance Sheet for the business for the same quarter and has asked you to furnish him with the figures for the expected trade receivables and payables to be included in the statement at December 31, 2021. Is that a reasonable request? If yes, what should these amounts be?…
Pelican Merchandising & More is a family-owned store. The business is now approaching the end of the year and is in the process of identifying its cash needs for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows: Month2021 - 2022 CashSales SalesOnAccount CashPurchases PurchasesOnAccount November 2021 $138,100 $480,000 $345,000 December 2021 $156,500 $600,000 $25,800 $380,000 January 2022 $170,975 $650,000 $44,625 $400,000 February 2022 $135,740 $700,000 $30,400 $480,000 March 2022 $226,420 $800,000 $55,100 $540,000 (ii) An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the…
Pelican Merchandising & More is a family-owned store. The business is now approaching the end of the year and is in the process of identifying its cash needs for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows: Month2021 - 2022 CashSales SalesOnAccount CashPurchases PurchasesOnAccount November 2021 $138,100 $480,000 $345,000 December 2021 $156,500 $600,000 $25,800 $380,000 January 2022 $170,975 $650,000 $44,625 $400,000 February 2022 $135,740 $700,000 $30,400 $480,000 March 2022 $226,420 $800,000 $55,100 $540,000 (ii) An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the…
Question 3 Mischa Furniture Stores (“MFS”) is a company that specialises in office furniture based in Windhoek. Due to the effects of Covid-19, it has become very imperative for the company to manage its cash flows effectively. The owner of MFS knows of your skills in management accounting and has requested your service in the preparation of the forth coming quarter’s cash budget. Upon interviews with different departments at MFS, you have ascertained the following information: Budget information for January, February and March 2023 is as follows: January February March N$ N$ N$ Sales 590 000 650 000 750 000 Production costs 300 000 350 000 420 000 Sales and Administration costs 150 000 170 000 200 000 Purchase of non-current assets…
This practice exercise explores simple cash budgets. Create a spreadsheet file that contains a simple monthly cash budget for the next year for the business described in the following scenario: Assume you are thinking about starting a business and would like to forecast your cash needs for the next six months. You expect sales to be approximately $30,000 per month for the first 12 months and your purchases to support sales will be approximately 60% of sales. You anticipate about 20% of your sales will be cash and 80% collected the following month. Your supplier has agreed to extend credit for 70 days at no cost (i.e. you will pay your bills on a two month lag). Your monthly expenses for rent, wages, utilities, and so forth will be approximately $3,500 per month. Identify which of these are fixed costs and which ones are variable costs. You have deposited $15,000 in a checking account to begin your operations and would like to maintain a minimum balance of $5,000 in that account. After…
Upon receipt of the budget the team manager has now informed you that the management of Miller Merchandising & More have indicated a desire to maintain a minimum cash balance of $125,000 each month. Based on the budget prepared, will the business be achieving this desired target? Given that the management does not wish to borrow any funds from outside sources, suggest three (3) internal strategies that the business may employ in order to improve the organization’s monthly cash flow. Each strategy must be fully explained.
GIVE NOTES SHOW ACCOUNT RECEIVABLE AND ACCOUNT PAYABLE The management accountant at Miller Merchandising & More, Odail Russell is in the process of preparing the cash budget for the business for the fourth quarter of 2021. It is customary for the business to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows: Month Cash Sales Sales on account Purchase August September October November December $85,000 $70,000 $88,550 $77,160 $174,870 $640,000 $550,000 $600,000 $800,000 $500,000 $420,000 $550,000 $500,000 $600,000 $450,000 An analysis of the records shows that trade receivables are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90: 50% in the month of sale 30% in the first month following the sale 20% in the second month following the sale Expected purchases include monthly cash purchases of 5%. All other purchases are…
Cash budget. Mary Jacobs, the controller of the Jenks Company is working on Jenks’ cash budget for year 2. She has information on each of the following items: Wages due to workers accrued as of December 31, year 1. Limits on a line of credit that may be used to fund Jenks’ operations in year 2. The balance in accounts payable as of December 31, year 1, from credit purchases made in year 1. Which of the items above should Jacobs take into account when building the cash budget for year 2? A. I, II , B. I, III, C. II, III, D, I, II, III
Varsity Supplies & Things is a family-owned store. The business is now approaching the end of the year and is desirous of identifying its expected cash inflows and outflows for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2023. The following data is available: Extracts from the sales and purchases budgets are as follows: Month 2022 - 2023 Cash Sales Sales on Account Cash Purchases Purchases On Account Nov-22 $142,100 $480,000 $345,000 Dec-22 $165,500 $600,000 $25,800 $380,000 Jan-23 $171,475 $650,000 $44,625 $400,000 Feb-23 $144,940 $700,000 $30,400 $480,000 Mar-23 $236,720 $800,000 $55,100 $540,000…
Varsity Supplies & Things is a family-owned store. The business is now approaching the end of the year and is desirous of identifying its expected cash inflows and outflows for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2023. The following data is available: Extracts from the sales and purchases budgets are as follows: Month 2022 - 2023 Cash Sales Sales on Account Cash Purchases Purchases On Account Nov-22 $142,100 $480,000 $345,000 Dec-22 $165,500 $600,000 $25,800 $380,000 Jan-23 $171,475 $650,000 $44,625 $400,000 Feb-23 $144,940 $700,000 $30,400 $480,000 Mar-23 $236,720 $800,000 $55,100 $540,000…
Varsity Supplies & Things is a family-owned store. The business is now approaching the end of the year and is desirous of identifying its expected cash inflows and outflows for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2023. The following data is available: Extracts from the sales and purchases budgets are as follows: Month 2022 - 2023 Cash Sales Sales On Account Cash Purchases Purchases On Account November 2022 $142,100 $480,00 $345,000 December 2022 $165,500 $600,000 $25,800 $380,000 January 2023 $171,475 $650,000 $44,625 $400,000 February 2023 $144,940 $700,000 $30,400 $480,000 March 2023 $236,720 $800,000 $55,100 $540,000 (ii) An analysis of the records shows that trade receivables (accounts receivable) are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90: 55% in…

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