You are the treasurer of Hodashian Suppliers Corporation (HSC), a sporting goods equipment distributor. You are trying to determine the cash flow needs for the company for the first three months of 2006. Sales Purchases S,G, &A Cash balance Other information: Actual Figures-2005 Oct $500 520 100 Nov $600 580 100 Dec $650 580 100 10 Estimated 2006 • Dividends payable in February are $20. • Interest payment is due in March of $50. • Minimum cash balance required is $10. Jan $700 620 100 Feb $750 630 100 Mar $800 660 100 ● 50% of sales are on a cash basis, of the remaining 50% half is collected in the following month and the other half two months later. • All purchases are paid for in the following month. • Selling, general, and administrative (S, G, & A) costs are fixed, and are paid as incurred.
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.
Use the attachement to answer the following. Please show calculations
Estimate what if any, HSC requires in the way of additional external financing at the beginning of January to ensure they have enough cash to maintain a $10 cash balance through until the end of March.
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