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Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the table below. Following Quarter in Coming Year Third Year First Second Fourth First Quarter $404 Sales forecast $500 $343 $356 $404 Paymore's labor and administrative expenses are $85 per quarter and interest on long-term debt is $60 per quarter. Suppose that Paymore's cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $356. Also, one third of the orders are paid for in the current month and then two thirds of the next quarter's orders are paid in advance. Work out the short-term financing requirements for the firm in the coming year using the above table. The firm pays no dividends. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Negative amounts should be indicated by a minus sign.)

Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the table below. Following Quarter in Coming Year Third Year First Second Fourth First Quarter $404 Sales forecast $500 $343 $356 $404 Paymore's labor and administrative expenses are $85 per quarter and interest on long-term debt is $60 per quarter. Suppose that Paymore's cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $356. Also, one third of the orders are paid for in the current month and then two thirds of the next quarter's orders are paid in advance. Work out the short-term financing requirements for the firm in the coming year using the above table. The firm pays no dividends. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Negative amounts should be indicated by a minus sign.)

Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter22: Master Budget (master)
Section: Chapter Questions
Problem 1R: Ranger Industries has provided the following information at June 30: Other information: Average...
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ware (Chapter 19) i Saved Help Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completic Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the table below. Following Quarter in Coming Year Year First Second Third First Quarter Fourth Sales forecast $500 $343 $356 $404 $404 Paymore's labor and administrative expenses are $85 per quarter and interest on long-term debt is $60 per quarter. Suppose that Paymore's cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $356. Also, one third of the orders are paid for in the current month and then two thirds of the next quarter's orders are paid in advance. Work out the short-term financing requirements for the firm in the coming year using the above table. The firm pays no dividends. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Negative amounts should be indicated by a minus sign.) x Answer is complete but not entirely correct. Quarter First Second Third Fourth Sources of cash Cash at start of period 40 2 X$ 76 X $ 30 X Net cash inflow (38) 38 X (88) x (76) O Cash at end of period 40 (12) (46) Minimum operating cash balance 30 30 30 30 28 0. 54 X $ 76 X Cumulative financing required < Prev 2 of 3 Next > ..... ..... %24 %24 %24 %24 %24
Transcribed Image Text:ware (Chapter 19) i Saved Help Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completic Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the table below. Following Quarter in Coming Year Year First Second Third First Quarter Fourth Sales forecast $500 $343 $356 $404 $404 Paymore's labor and administrative expenses are $85 per quarter and interest on long-term debt is $60 per quarter. Suppose that Paymore's cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $356. Also, one third of the orders are paid for in the current month and then two thirds of the next quarter's orders are paid in advance. Work out the short-term financing requirements for the firm in the coming year using the above table. The firm pays no dividends. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Negative amounts should be indicated by a minus sign.) x Answer is complete but not entirely correct. Quarter First Second Third Fourth Sources of cash Cash at start of period 40 2 X$ 76 X $ 30 X Net cash inflow (38) 38 X (88) x (76) O Cash at end of period 40 (12) (46) Minimum operating cash balance 30 30 30 30 28 0. 54 X $ 76 X Cumulative financing required < Prev 2 of 3 Next > ..... ..... %24 %24 %24 %24 %24
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Explanation -

Budgeting -

Budgeting is the process of estimating future operations based on past performance. % are estimated and collections are estimated based on past performance.

Budgeting helps to control the operations from getting excess over its budgeted figures.

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