The beginning cash balance is $16,500. Sales are forecasted at $820,000 of which 80% will be on account. Seventy percent of credit sales are expected to be collected in the year of sale. Cashexpenditures for the year are forecasted at $472,000. Accounts Receivable from previous accounting periods totaling $11,800 will be collected in the current year. The company is required tomake a $16,500 loan payment and an annual interest payment on the last day of every year. The loan balance as of the beginning of the year is $90,000, and the annual interest rate is 9%.Compute the excess of available cash over cash disbursements.Excess of available cash over cash disbursements$

Detailed explanation: Cash Receipts and Payments : Cash Balance beginning of year $ 16,500Add :…

Answered: The beginning cash balance is $16,500.…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2MC

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Similar questions

My Aunts Closet Store collects 60% of its accounts receivable in the month of sale and 35% in the month after the sale. Given the following sales, how much cash will be collected in March?
Schedule of cash payments for service company Horizon Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows: Depreciation, insurance, and property taxes represent 9,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June. Seventy percent of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month. Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May.
Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase, and 5% in the second month following the purchase. What are the cash payments if it made the following purchases in 2018?
Broussard Skateboard’s sales are expected to increase by 15% from $8 million in 2018 to $9.2 million in 2019. Its assets totaled $5 million at the end of 2018. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2018, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. Use the AFN equation to forecast Broussard’s additional funds needed for the coming year.
Nonnas Re-Appliance Store collects 55% of its accounts receivable in the month of sale and 40% in the month after the sale. Given the following sales, how much cash will be collected in February?
Assume that it is now July of Year 1 and that the brothers are developing projected financial statements for the following year. Further, assume that sales and collections in the first half-year matched the predicted levels. Use the Year-2 sales forecasts shown in the following table to estimate next year’s receivables levels for the end of March and for the end of June.
The beginning cash balance is $20,600. Sales are forecasted at $715,000 of which 70% will be on account. The remainder are cash sales. Sixty percent of credit sales are expected to be collected in the year of sale. Cash expenditures for the year are forecasted at $465,000. Accounts receivable from previous accounting periods totaling $11,000 will be collected in the current year. The company is required to make a $21,500 loan payment and an annual interest payment on the last day of the year. The loan balance as of the beginning of the year is $145,000, and the annual interest rate is 10%. What will be reported as 'cash' on the budgeted balance sheet?
The George Company has a policy of maintaining an end-of-month cash balance of at least $30,000.In months where a shortfall is expected, the company can draw in $1,000 increments on a line ofcredit it has with a local bank, at an interest rate of 12% per annum. All borrowings are assumed forbudgeting purposes to occur at the beginning of the month, while all loan repayments (in $1,000increments of principal) are assumed to occur at the end of the month. Interest is paid at the end ofeach month. For April, an end-of-month cash balance (prior to any financing and interest expense)of $18,000 is budgeted; for May, an excess of cash collected over cash payments (prior to any interest payments and loan repayments) of $22,000 is anticipated. What is the interest payment estimatedfor April (there is no bank loan outstanding at the end of March)? What is the total financing effect(cash interest plus loan transaction) for May?

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