Managerial Accounting, Binder Ready Version: Tools for Business Decision Making
7th Edition
ISBN: 9781118338421
Author: Weygandt, Jerry J.; Kimmel, Paul D.; Kieso, Donald E.
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 9, Problem 9.4DI
Batista Company management wants to maintain a minimum monthly cash balance of $25,000. At the beginning of April, the cash balance is $25,000, expected cash receipts for April are $245,000, and cash disbursements are expected to be $255,000. How much cash, if any. must be borrowed to maintain the desired minimum monthly balance?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
crane company management wants to maintain a minimum monthly cash balance of $26,500. At the begining of April, the cash balance is $26,500, expected cash receipts for April are $259,700, and cash disbursements are expected to be $270,300. How much cash, if any, must be borrowed to maintain the desired minimum monthly balance?
Amount to be borrowed to maintain the desired minimum monthly balance ?
Crane Company management wants to maintain a minimum monthly cash
balance of $20,000. At the beginning of April, the cash balance is $20,000,
expected cash receipts for April are $196,000, and cash disbursements are
expected to be $204,000. How much cash, if any, must be borrowed to
maintain the desired minimum monthly balance? Amount to be borrowed to
maintain the desired minimum monthly balance $11
Crane Company management wants to maintain a minimum monthly cash balance of $20,000. At the beginning of April, the cash
balance is $20,000, expected cash receipts for April are $196,000, and cash disbursements are expected to be $204,000
How much cash, if any, must be borrowed to maintain the desired minimum monthly balance?
Amount to be borrowed to maintain the desired minimum monthly balance $
I I
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?
Chapter 9 Solutions
Managerial Accounting, Binder Ready Version: Tools for Business Decision Making
Ch. 9 - Prob. 1QCh. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - (a) Accounting plays a relatively unimportant role...Ch. 9 - What criteria are helpful in determining the...Ch. 9 - Lori Wilkins maintains that the only difference...Ch. 9 - Prob. 7QCh. 9 - What is budgetary slack? What incentive do...Ch. 9 - Prob. 9QCh. 9 - What budget is the starting point in preparing the...
Ch. 9 - The production budget shows both unit production...Ch. 9 - Alou Company has 20,000 beginning finished goods...Ch. 9 - In preparing the direct materials budget for Quan...Ch. 9 - The production budget of Justus Company calls for...Ch. 9 - Ortiz Companys manufacturing overhead budget shows...Ch. 9 - Everly Companys variable selling and...Ch. 9 - For Goody Company, the budgeted cost for one unit...Ch. 9 - Indicate the supporting schedules used in...Ch. 9 - Identify the three sections of a cash budget. What...Ch. 9 - Noterman Company has credit sales of 600,000 in...Ch. 9 - Prob. 21QCh. 9 - Prob. 22QCh. 9 - Maris Company uses the following budgets: balance...Ch. 9 - Paige Company estimates that unit sales will be...Ch. 9 - Sales budget data for Paige Company are given in...Ch. 9 - Perine Company has 2,000 pounds of raw materials...Ch. 9 - For Gundy Company, units to be produced are 5,000...Ch. 9 - For Roche Inc., variable manufacturing overhead...Ch. 9 - Elbert Company classifies its selling and...Ch. 9 - North Company has completed all of its operating...Ch. 9 - Kaspar Industries expects credit sales for...Ch. 9 - Moore Wholesalers is preparing its merchandise...Ch. 9 - Use this list of terms to complete the sentences...Ch. 9 - Pargo Company is preparing its master budget for...Ch. 9 - Pargo Company is preparing its budgeted income...Ch. 9 - Batista Company management wants to maintain a...Ch. 9 - Zeller Company estimates that 2017 sales will be...Ch. 9 - Trusler Company has always done some planning for...Ch. 9 - Edington Electronics Inc. produces and sells two...Ch. 9 - Thome and Crede, CPAs, are preparing their service...Ch. 9 - Turney Company produces and sells automobile...Ch. 9 - DeWitt Industries has adopted the following...Ch. 9 - On January 1, 2017, the Hardin Company budget...Ch. 9 - Rensing Ltd. estimates sales for the second...Ch. 9 - Fuqua Companys sales budget projects unit sales of...Ch. 9 - Rodriguez, Inc., is preparing its direct labor...Ch. 9 - Lowell Company makes and sells artistic frames for...Ch. 9 - Atlanta Company is preparing its manufacturing...Ch. 9 - Kirkland Company combines its operating expenses...Ch. 9 - Fultz Company has accumulated the following budget...Ch. 9 - Danner Company expects to have a cash balance of...Ch. 9 - Deitz Corporation is projecting a cash balance of...Ch. 9 - The controller of Trenshaw Company wants to...Ch. 9 - Nieto Companys budgeted sales and direct materials...Ch. 9 - Green Landscaping Inc. is preparing its budget for...Ch. 9 - Pletcher Denial Clinic is a medium-sized dental...Ch. 9 - In May 2017, the budget committee of Grand Stores...Ch. 9 - Emeric and Ellies Painting Service estimates that...Ch. 9 - PROBLEMS: SET A Cook Farm Supply Company...Ch. 9 - Deleon Inc. is preparing its annual budgets for...Ch. 9 - Hill Industries had sales in 2016 of 6,800,000 and...Ch. 9 - Colter Company prepares monthly cash budgets....Ch. 9 - The budget committee of Suppar Company collects...Ch. 9 - Prob. 9.6APCh. 9 - CURRENT DESIGNS Diane Buswell is preparing the...Ch. 9 - MANAGEMENT DECISION-MAKING Decision-Making Across...Ch. 9 - Elliot Hesse Inc. manufactures ergonomic devices...Ch. 9 - Real-World Focus Information regarding many...Ch. 9 - Prob. 9.4BYPCh. 9 - Broadening Your Ethics Case BYP9-5 You are an...Ch. 9 - All About You In order to get your personal...Ch. 9 - Prob. 9.7BYP
Additional Business Textbook Solutions
Find more solutions based on key concepts
E9-14 Defining common receivables terms
Learning Objective 1
Match the terms with their correct definition.
...
Horngren's Accounting (11th Edition)
BE1-7 Indicate which statement you would examine to find each of the following items: income statement (IS), ba...
Financial Accounting
25. What is the relationship, if any, between the amount shown in the adjusted trial balance column for an acco...
Financial Accounting: Tools for Business Decision Making, 8th Edition
Present Value, Present Value of an Ordinary Annuity, Present Value of an Annuity Due, Lease Payments/Various Co...
Intermediate Accounting
Would the following companies most likely use a job order costing system or a process costing system? Paint man...
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
How is inventory tracked under a perpetual inventory system?
Intermediate Accounting (2nd Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is collected in the month of sale, 25% is collected the month after the sale, and 5% is collected the second month after the sale. How much cash will be collected in August if sales are estimated as $75,000 in June, $65,000 in July, and $90,000 in August?arrow_forwardThe 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. Cash expenditures 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 to make 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 $arrow_forwardthe second quarter of 2021: Credit sales Credit purchases Cash disbursements Wages, taxes, and expenses Interest Equipment purchases Beginning cash balance Cash receipts Cash collections from credit sales Total cash available Cash disbursements The company predicts that 5 percent of its credit sales will never be collected, 30 percent of its sales will be collected in the month of the sale, and the remaining 65 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase. Purchases Wages, taxes, and expenses Interest In March 2021, credit sales were $190,000 and credit purchases were $130,000. Using this information, complete the following cash budget: (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.) Equipment purchases April May June $320,000 $300,000 $360,000 128,000 151,000 176,000 Total cash disbursements 44,000 11,000 80,000 Ending cash balance 11,500 11,000 150,000 $…arrow_forward
- Brandeis, Inc has a 45-day accounts payable period. The firm has expected quarterly sales of $2,400, $2,800, $3,600, and $4,200, respectively, for the next calendar year. The cost of goods sold for a quarter is equal to 70% of the next quarter sales. The firm has a beginning payables balance of $1,200 as of quarter one. What is the amount of the projected cash disbursements for accounts payable for quarter 3 of the next year? Each quarter has 90 days. Multiple Choice $3,900 $2,730 $2,240 $2,870 $3,060arrow_forwardThe 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?arrow_forwardSuppose that the Sales in December 2019 were 41,498. The sales are expected to grow by 5% in January 2020, by 10% in February 2020, and by 15% in March 2020. After that, the sales are expected to grow by 9%. The company's cash collection is as follows: 24% is collected in the same month, 47% is collected in the next month, and the remainder in the following month. What is the cash collection for July, 2020?arrow_forward
- Suppose that the Sales in December 2019 were 78,893. The sales are expected to grow by 15% in January 2020, by 4% in February 2020, and by 5% in March 2020. After that, the sales are expected to grow by 4%. The company's cash collection is as follows: 22% is collected in the same month, 22% is collected in the next month, and the remainder in the following month. What is the cash collection for June, 2020?arrow_forwardFine Co. has the following sales forecasts for the third quarter of 2021: ₱85,000 (July), ₱88,000 (Aug), ₱82,000 (Sep). All sales are on credit. Seventy-five percent are collected in the month of sales and remainder is collected the following month. Minimum cash balance is ₱10,000. How much cash would be collected in August from sales?arrow_forwardAssume that sales and expenses forecasts for months April, May, June, and July are as follows. month, 60% are paid in the next month, and 20% are paid in the second month after. All expenses in a month are paid in the same month. There is a $20,000,000 minimum required cash balance at the end of each month, and any shortage from this minimum requirement will be covered by obtaining a loan. Any excess over $20,000,000 will be used to reduce or pay off cumulative loan. Initial cash balance in June is $6,000,000 and there is no cumulative loan at this time. Monthly prorated tax rate is 2%, and monthly interest rate on cumulative loan is 1%. Requirements: Prepare cash budget proforma for months June and July and interpret the result in detail.arrow_forward
- Melody Inc. had a November ending cash balance of $15,000. As well, it had sales of $10,000 in November, $20,000 in December, and projects sales of $25,000 for January, $30,000 for February, and $35,000 for March. The firm collects its receivables in the month after the sale. Given this information, calculate its cash balance at the end of March. Assume that every month has 30 days. $75,000 $80,000 $90,000 $100,000 $110,000arrow_forwardDear Bartleby, I need assistance calculating interest for part b. b. Assume that management of SeaTech Inc. desires to maintain a minimum cash balance of $10,000 at the beginning of each month and has arranged a $50,000 line of credit with a local bank at an interest rate of 10% to ensure the availability of funds. Borrowing transactions are to occur only at the end of months in which the budgeted cash balance would otherwise fall short of the $10,000 minimum balance. Repayments of principal and interest are to occur at the end of the earliest month in which sufficient funds are expected to be available for repayment. (Use 360 days year for calculations.) Following are the budgeted income statements for the second quarter of 2019 for SeaTech Inc.: April May June Sales $ 112,000 $ 136,000 $ 152,000 Cost of goods sold* 76,800 91,200 100,800 Gross profit $ 35,200 $ 44,800 $ 51,200 Operating expenses† 17,600 20,000 21,600…arrow_forwardSuppose that the Sales in December 2019 were 86,536. The sales are expected to grow by 9% in January 2020, by 14% in February 2020, and by 15% in March 2020. After that, the sales are expected to grow by 10%. The company's cash collection is as follows: 60% is collected in the same month and the remainder in the next month. What is the cash collection for June, 2020?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY