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Case 4-66 Cash Management Hollis Corporation has the following budgeted schedule for expected cash receipts and cash disbursement. Hollis begins July with a cash balance of $20,000, $15,000 of short-term debt, and no short-term investments. Hollis uses the following cash management policy: End-of-month cash should equal plus the excess of expected disbursements over receipts for the next month. If receipts are expected to exceed disbursements in the next month, the current month ending cash balance should be $20,000. Excess cash should be invested in short-term investments unless there is short-term debt, in which case excess cash should first be used to reduce the debt. Cash deficiencies are met first by selling short-term investments and second by incurring short-term debt. Required: Calculate the expected buying and selling of short-term investments and the in concurrence and repayment of short-term debt at the end Of July, August, and September.

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881
BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881

Solutions

Chapter
Section
Chapter 4, Problem 66.1C
Textbook Problem

Case 4-66 Cash Management

Hollis Corporation has the following budgeted schedule for expected cash receipts and cash disbursement.

Chapter 4, Problem 66.1C, Case 4-66 Cash Management Hollis Corporation has the following budgeted schedule for expected cash

Hollis begins July with a cash balance of $20,000, $15,000 of short-term debt, and no short-term investments. Hollis uses the following cash management policy:

  1. End-of-month cash should equal plus the excess of expected disbursements over receipts for the next month.
  2. If receipts are expected to exceed disbursements in the next month, the current month ending cash balance should be $20,000.
  3. Excess cash should be invested in short-term investments unless there is short-term debt, in which case excess cash should first be used to reduce the debt.
  4. Cash deficiencies are met first by selling short-term investments and second by incurring short-term debt.

Required:

Calculate the expected buying and selling of short-term investments and the in concurrence and repayment of short-term debt at the end Of July, August, and September.

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Chapter 4 Solutions

Cornerstones of Financial Accounting
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Bank Reconciliation OBJECTIVE The...Ch. 4 - OBJECTIVE Problem 4-6111 Recording Petty Cash...Ch. 4 - Problem 4-553 Role of Internal Control Internal...Ch. 4 - Problem 4-563 Internal Control Procedures for Cash...Ch. 4 - Problem 4-515 internal Control for Cash After...Ch. 4 - Problem 4-585 Bank Reconciliation OBJECTIVE o...Ch. 4 - OBJECTNE The items on the bank statement are...Ch. 4 - Problem 4-603 Bank Reconciliation OBJECTIVE o The...Ch. 4 - Problem 4-61 B Recording Petty Cash Transactions...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-63 The Operating Cycle There are two retail...Ch. 4 - Case 4-63 The Operating Cycle There are two retail...Ch. 4 - Case 4-64 Internal Controls for Cash Disbursements...Ch. 4 - Case 4-64 Internal Controls for Cash Disbursements...Ch. 4 - Case 4-65 Internal Controls for Collection of...Ch. 4 - Case 4-66 Cash Management Hollis Corporation has...Ch. 4 - Case 4-66 Cash Management Hollis Corporation has...Ch. 4 - Case 4-67 Cash and Internal Controls Identify a...Ch. 4 - Case 4-67 Cash and Internal Controls Identify a...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...

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