The business needs to have a sense of its future cash inflows and outflows for the quarter and therefore requires the preparation of the following: A schedule of budgeted cash collections for trade receivables for each of the months January to March. A schedule of expected cash disbursements for accounts payable for each of the months January to March. A cash budget, with a total column, for the quarter ending March 31, 2023, 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.
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- Freda’s Phones Inc. is a mobile phone retailer. The company is planning its cash needs for the month of January 2023. The statement of financial position showed the following at its fiscal year-end, December 31, 2022. Assets Current Cash $20,000 Accounts receivable 330,000 Inventory 120,000 470,000 PPE, net 4,000,000 $4,470,000 Liabilities Current Operating loan $100,000 Accounts payable 140,000 240,000 Non-current borrowings 3,000,000 3,240,000 Shareholders’ Equity Common shares 120,000 Retained earnings 1,110,000 1,230,000 $4,470,000 Other information: a. Cash collection i. November credit sales $0 ii. December credit sales $550,000 iii. % cash sales each month 20% iv. % credit sales collected in same month 40% v. % credit sales collect in next month 60% vi. % credit sales collected in second month 0% b. January total sales $500,000 c. Inventory information i. February total sales $450,000 ii. Gross profit ratio January 60% iii. Gross profit ratio February 60% iv. % purchases paid…Scan House, Inc. prepares financial records during the year on a cash basis. As the newly appointed controller, you have been asked to prepare the annual financial statement on an accrual basis. The following cash flows occurred during the year ended December 31, 2020: Cash receipts:From customers $765,000Interest on note 3,000Loan from a local bank 200,000Total cash receipts $968,000Cash disbursements:Purchase of merchandise $450,000Annual insurance payment 12,000Payment of salaries and wages 250,000Dividends paid to shareholders 25,000Annual rent payment 36,000Total cash disbursements $773,000 Selected balance sheet information: 12/31/19 12/31/20Cash $25,000 $220,000Accounts receivable 62,000 115,000Inventory 80,000 50,000Prepaid insurance 2,500…Imagine you are the finance manager of Al Mohsin Company. The company management feels that the cash management of the company should be made more effective. The following information from the company’s records is available to you: Additional Information Miscellaneous Month Sales Purchase Wages expenses February 40,000 20,000 7,000 1,000 March 55,000 14,000 8,000 3,000 April 60,000 28,000 9,000 2,000 May 74,000 30,000 9,000 2,000 June 90,000 32,000 8,800 3,500 Al Mohsin LLC expects to have RO 8,000 cash balance at the beginning of April. Period of credit allowed by suppliers – 2 months 40% of the total sale is for cash. Half of the credit sale is collected in the next month of sale and the remaining half in the following month after that. Delay in payment of wages 1/4 month Delay in payment of expenses 1/2 month Income tax to be paid in the month of June RO 1,500. You are required to :…
- Imagine you are the finance manager of Al Mohsin Company. The company management feels that the cash management of the company should be made more effective. The following information from the company’s records is available to you: Miscellaneous Month Sales Purchase Wages expenses February 40,000 20,000 7,000 1,000 March 55,000 14,000 8,000 3,000 April 60,000 28,000 9,000 2,000 May 74,000 30,000 9,000 2,000 June 90,000 32,000 8,800 3,500 Additional Information Al Mohsin LLC expects to have RO 8,000 cash balance at the beginning of April. Period of credit allowed by suppliers – 2 months 40% of the total sale is for cash. Half of the credit sale is collected in the next month of sale and the remaining half in the following month after that. Delay in payment of wages 1/4 month Delay in payment of expenses 1/2 month Income tax to be paid in the month of June RO 1,500. You are required to :…Effect of transactions on cash flows The financial year for Gamma Limited ends on 30 June 2019. Management has asked you what effect each of the following June transactions will have on net profit before tax, cash flow from operations, cash flow from investing and cash flow from financing for the year ended 30 June 2019: 1. Sent invoices for $40 000 to customers during June for work carried out in June; $19 000 of this had been collected by year-end. 2. Borrowed $300 000 from the bank on 10 June, with principal and interest repayable in six months. Accrued interest at 30 June is $2500. 3. Paid salaries for the month of $80 000, with $5000 in wages owing at year-end. 4. Received $30 000 deposit on a job that will be carried out in July 2019. 5. Paid accounts payable of $35 000 which was outstanding at 31 May 2019. 6. Sold old equipment for $20 000. The equipment originally cost $300 000 with accumulated depreciation at the time of sale of $250 000. 7. Purchased new equipment on 20 June…Company ABC is preparing its 2021 financial statements. At the end of 2021, the company purchased a building for $500,000 making a down payment of $200,000 cash and signing a $300,000 mortgage note. The president of Company ABC, Jackie Brown understand that debt transactions are considered a financing activity from a business perspective and also, that purchases of long-term assets are investing activities. Consequently, Jackie is pondering how to report this transaction on the statement of cash flows and has asked you as her accountant to look into the issue. Using the related GAAP, prepare a memo to the president that summarizes how to report this transaction on the State of Cash Flows
- Required: Solutions and explanation The beginning cash balance of Arizona Corp. is P700,000. It foresees the following cashflows for the month: (A) Collections from customers - P1,000,000, (B) Payments to suppliers - P550,000, (C) Other operating cash expenses - P50,000, (D) Payments to creditors - P50,000 and (E) collection of a receivable from an officer - P80,000. If Arizona needs to have a month-end balance of P1,000,000, how much should it borrow or (invest)? * (P130,000) P110,000 (P110,000) P130,000On August 1, 2022, "Ferretería El Clavo" decided to establish a fixed cash fund in amount of $20,000, hoping that this amount would be sufficient to cover minor expenses during a week of normal operations.For management of these funds, Mrs. Rosa Rosales was made responsible, and on August 8 she presented an accounting for expenses of first week of operations, details of which are as follows: STATEMENT OF ACCOUNTS NO. 1 FOR THE PERIOD FROM AUGUST, 01 TO AUGUST 06, 2006 Total Received $ 20,000MINUS: Gasoline purchase guides $ 6,850Postag from Mails $ 1,650Transportation, Junior $ 3,200Purchase of Coffee and soft drinks, as per Supermarket receipt $ 6,900 Total expenses $ 18,600Fund balance…Here is the question Massa Company, which has been operating for three years, provides marketing consulting services worldwide for dot-com companies. You are a financial analyst assigned to report on the Massa management team’s effectiveness at managing its assets efficiently. At the start of 2019 (its fourth year), Massa's T-account balances were as follows. Dollars are in thousands. Transactions for 2019: Provided $59,700 in services to clients who paid $48,800 in cash and owed the rest on account. Received $5,800 cash from clients on account. Received $520 in cash as interest revenue on investments. Paid $36,000 in wages, $12,900 in travel, $6,800 in rent, and $1,300 on accounts payable. Received $1,200 in cash from clients in advance of services Massa will provide next year. Received a utility bill for $690 for 2019 services. Declared and immediately paid $370 in dividends to stockholders. The T-account balances were as follows. (see attached 1) Here is the question: Calculate…
- After tax returns were filed ASKnow! needs to compile cash flows and relevant accrual information Description 2015(Cash Flows) REVENUES $182,000 ASKnow billings totaled $30,000, and were paid by the businesses within 15 days of the following month. EXPENSES Food costsBy year-end, only one week of food costs remained unpaid, totaling $9,000 $60,000 Supply costsSmall office items paid with petty cash. $4,800 UtilitiesAt the end of the year, one month of electricity, telephone, and water remained unpaid. $8,000 Employee wages These costs were kept fairly low one week of wages ($1,400) remained due. $44,000 Licenses April 1, 2015 $900 Insurance A comprehensive insurance policy was purchased on April 1, 2015. The policy covered loss due to theft, fire, or storm damage. The policy also covered business-related risks such as lawsuits arising from customer injury. This policy covers three years. $18,000 Income taxesincome taxes…Required: The business needs to have a sense of its future cash flows and therefore requires the preparation of the following: a. A schedule of expected cash disbursements for accounts payable (purchases on account) for each of the months July to September.Prepare the financial statement for the year ended 31 December 2022 that provides details about the cash inflows and cash outflows of Megazone Limited MEGAZONE LIMITEDMegazone Limited is well known for its focus on innovation and this is highlighted in the company’s website. The website also tells a story of growth and success in the marketplace. This, combined with the excellent quality products offered, has made Megazone Limited a leader in the marketplace. At the end of 2021 the plant and equipment (at carrying value) totalled R5 000 000, a long-term investment was valued at R400 000, inventories amounted to R2 050 000, R1 750 000 was owed by trade debtors, cash in the bank amounted to R350 000, the ordinary share capital balance was R3 100 000, the accumulated undistributed profits amounted to R2 500 000, an amount of R3 350 000 was owed to Vap Bank in respect of a long-term loan, R270 000 was owed to the trade creditors, R250 000 was owed to shareholders for the final dividend and…