ring its bu the first qu of 2022. The next step is to prepare a cash receipts schedule and a cash payments schedule. The following information has been collected: 1. Clients usually pay 50% of their fee in the month when the service is provided, 40% the next month, and 10% in the second month after receiving the service. 2. Actual service revenues for 2021 and expected service revenues for 2022 are as follows: November 2021, $90,000; December 2021, $70,000; January 2022, $110,000; February 2022, $120,000; and March 2022, $130,000. 3. The company pays for purchases of landscaping supplies (direct materials) 60% in the month of purchase and 40% the following month. Actual purchases for 2021 and expected purchases for 2022 are: December 2021, $14,000; January 2022, $13,000; February 2022, $15,000; and March 2022, $20,000. Instructions a. Prepare the following schedules for each month in the first quarter of 2022 and for the quarter in total: (1) expected collections from clients, and (2) expected payments for landscaping supplies. b. Determine the following balances at March 31, 2022: (1) accounts receivable, and (2) accounts payable.

ring its bu the first qu of 2022. The next step is to prepare a cash receipts schedule and a cash payments schedule. The following information has been collected: 1. Clients usually pay 50% of their fee in the month when the service is provided, 40% the next month, and 10% in the second month after receiving the service. 2. Actual service revenues for 2021 and expected service revenues for 2022 are as follows: November 2021, $90,000; December 2021, $70,000; January 2022, $110,000; February 2022, $120,000; and March 2022, $130,000. 3. The company pays for purchases of landscaping supplies (direct materials) 60% in the month of purchase and 40% the following month. Actual purchases for 2021 and expected purchases for 2022 are: December 2021, $14,000; January 2022, $13,000; February 2022, $15,000; and March 2022, $20,000. Instructions a. Prepare the following schedules for each month in the first quarter of 2022 and for the quarter in total: (1) expected collections from clients, and (2) expected payments for landscaping supplies. b. Determine the following balances at March 31, 2022: (1) accounts receivable, and (2) accounts payable.

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter6: Managing Cash Flow

Section: Chapter Questions

Problem 1EP

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Given the information below, answer questions 1-3. • Assume you are working on budgeting for the room department of your hotel. • Assume the hotel’s ‘Room Revenue (Sales)’ was $1,640,000 during 2019. Based on the lodging forecast report, you expect the ‘Room Revenue (Sales)’ to increase by 3.7% next year. • Assume the ‘Guest Supplies’ expenses (variable costs) from the room department was $246,000 during 2019. For 2020, this variable cost will remain at the same percentage of the Room Revenue (Sales) as experienced in 2019. • Assume the ‘Salaries’ expenses (fixed costs) from the room department was $280,000 during 2019. For 2020, this fixed cost will increase by 2% due to the expected increase in living expenses in this area. 1. What will be the budgeted ‘Room Revenue (Sales)’ for 2020 ($)? Note: The Answer field only accepts numbers. Thus, do not include $ or commas when you type your answer. Type your answer as a whole number (e.g., 200000).
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
Styles Abuhatim LLC has given the following particulars. You are required to prepare a cash budget for the three months ending 31st December 2019 Months Sales Materials Wages ( OMR) Over heads (OMR) (OMR) (OMR) August September October 20000 10200 3800 1900 21000 10000 3800 2100 23000 9800 4000 2300 November 25000 10000 4200 2400 December 30000 10800 4500 2500 Credit terms are 1.. Sales /Debtors 10% sales are on Cash, 50% of the credit sales are collected in next month and the balance in the following month 2. Creditors- materials 2 months Wages 1 month -1 month Overheads 3. Cash balance on 1st October is expected to be Ro.8000 4. A machinery will be installed in August at a cost of RO.100000, the monthly instalment of RO.5000 is payable from October onwards 5. Dividend at 10% on preference share capital RO.300,000 will be paid on 1* December 2019 6. Advance to be received for the sale of vehicles RO.20000in December 7. Income tax to be received in December RO.5000
Imagine the marketing team has an annual budget for 2022 of $500k. Using the table below, create a tracker in excel that communicates to the marketing team, as of the end of Q2 2022, how their actual spend compares to that which has been budgeted. Make up numbers for Q2 2022, and also make up a few examples of commentary that might explain or give context to the spend that is left and/or has been exceeded. Item Annual budget Revisionist History $ 50,000 The Happiness Lab $ 50,000 Deep Cover $ 50,000 Cautionary Tales $ 40,000 Bad Women $ 25,000 A Slight Change of Plans $ 40,000 The Bomber Mafia $ 65,000 Web development $ 100,000 Marketing tech $ 30,000 Social campaign management $ 50,000 total $ 500,000
From the following information, prepare a monthly cash budget for the three months ending 31st December 2023. Month June July August September October November December Materials Wages 1,800 650 2,000 750 2,400 750 2,250 750 2.300 800 2,500 2,600 900 1,000 The credit terms are as follows: 10% of sales are in cash. 3 months to debtors. 2 months from Creditors. Sales 3,000 3,250 3,500 3,750 4,000 4,250 4,500 The lag in payment for wages is 1/4 month and 1/2 month for overheads. The cash and bank balance on 1st October is expected to be RO 1,500. Other information is given as follows: Admin. Selling, etc 160 160 175 175 200 200 225 Production 225 225 250 300 300 350 350 Preference share dividends @ 5% on RO 50,000 are to be paid on 1st December. Calls on 250 equity shares @RO 2 per share are expected on 1st November. Dividends from investments amounting to RO 250 are expected on 31st December. Income tax (advance) is to be paid in December RO 1,500 Plant and machinery are to be installed…
3. What will be the budgeted ‘Salaries’ expenses for 2020 ($)? Note: The Answer field only accepts numbers. Thus, do not include $ or commas when you type your answer. Type your answer as a whole number (e.g., 200000). • Assume you are working on budgeting for the room department of your hotel. • Assume the hotel’s ‘Room Revenue (Sales)’ was $1,640,000 during 2019. Based on the lodging forecast report, you expect the ‘Room Revenue (Sales)’ to increase by 3.7% next year. • Assume the ‘Guest Supplies’ expenses (variable costs) from the room department was $246,000 during 2019. For 2020, this variable cost will remain at the same percentage of the Room Revenue (Sales) as experienced in 2019. • Assume the ‘Salaries’ expenses (fixed costs) from the room department was $280,000 during 2019. For 2020, this fixed cost will increase by 2% due to the expected increase in living expenses in this area.
REQUIRED Use the information given below to prepare the Cash Budget for each of the first three months of operations (i.e. January, February, March 2024). Use separate monetary columns for each month. INFORMATION The following information relates to Baby Manufacturers which will commence business on 01 January 2024 with R750 000 cash: 1. New machinery and equipment will be purchased on 02 January 2024 for R300 000. A deposit of 20% will be paid immediately. The balance of the debt as well as finance charges of R18 000 will be paid in 12 equal instalments commencing February 2024. 2. Production will commence on 05 January 2024 and 30% of the sales for February's will be manufactured in January. Each month thereafter the production will consist of 70% of the current month's sales and 30% of the following month's sales. 3. Estimated sales at R72 per unit are as follows: January February March April Units 0 8 500 11 000 10 500 4. Cash sales are expected to comprise 60% of the total sales.…
2. What will be the budgeted ‘Guest Supplies’ expenses for 2020 ($)? • Assume you are working on budgeting for the room department of your hotel. • Assume the hotel’s ‘Room Revenue (Sales)’ was $1,640,000 during 2019. Based on the lodging forecast report, you expect the ‘Room Revenue (Sales)’ to increase by 3.7% next year. • Assume the ‘Guest Supplies’ expenses (variable costs) from the room department was $246,000 during 2019. For 2020, this variable cost will remain at the same percentage of the Room Revenue (Sales) as experienced in 2019. • Assume the ‘Salaries’ expenses (fixed costs) from the room department was $280,000 during 2019. For 2020, this fixed cost will increase by 2% due to the expected increase in living expenses in this area. Note: The Answer field only accepts numbers. Thus, do not include $ or commas when you type your answer. Type your answer as a whole number (e.g., 200000).
As a manager responsible for an operating budget, you will usually be expected to compare your department's actual expenses to your budgeted expenses as well as to its performance in prior periods. True FalseMy nephew has promised to repay a loan by making $1,200.00 payments in April of each of the next 5 years. Using the Present Value Table found in Appendix 13-A on page 141, and assuming an interest rate of 5%, what is the value of these payments?
ABC Pte Ltd is a retailer of health supplements. As at 1 April 2022, the cash at bank balance is $250,000. The company’s policy is to maintain a minimum cash balance of $100,000. ABC Pte Ltd is developing a cash budget for April, May and June 2022, and the following information was gathered: Cash Receipts 1 Sales revenue for February and March 2022 are $200,000 and $180,000 respectively. The forecasted sales revenue for April, May and June 2022 are $170,000, $220,000 and $280,000 respectively. Historically, 30% of the firm’s sales are in cash, 60% are collected in the next month, and the remaining 10% are collected in the second month following the sale. 2 Monthly rental income received is $60,000. 3 Interest income of $10,000 will be received in May 2022. Cash Disbursements 4 The expected purchases are $150,000, $110,000 and $190,000 for the months of April, May and June 2022 respectively. The company pays all its purchases in the month of…
ABC Pte Ltd is a retailer of health supplements. As at 1 April 2022, the cash at bank balance is $250,000. The company’s policy is to maintain a minimum cash balance of $100,000. ABC Pte Ltd is developing a cash budget for April, May and June 2022, and the following information was gathered: Cash Receipts 1 Sales revenue for February and March 2022 are $200,000 and $180,000 respectively. The forecasted sales revenue for April, May and June 2022 are $170,000, $220,000 and $280,000 respectively. Historically, 30% of the firm’s sales are in cash, 60% are collected in the next month, and the remaining 10% are collected in the second month following the sale. 2 Monthly rental income received is $60,000. 3 Interest income of $10,000 will be received in May 2022. Cash Disbursements 4 The expected purchases are $150,000, $110,000 and $190,000 for the months of April, May and June 2022 respectively. The company pays all its purchases in the month of…
ABC Pte Ltd is a retailer of health supplements. As at 1 April 2022, the cash at bank balance is $250,000. The company’s policy is to maintain a minimum cash balance of $100,000. ABC Pte Ltd is developing a cash budget for April, May and June 2022, and the following information was gathered: Cash Receipts 1 Sales revenue for February and March 2022 are $200,000 and $180,000 respectively. The forecasted sales revenue for April, May and June 2022 are $170,000, $220,000 and $280,000 respectively. Historically, 30% of the firm’s sales are in cash, 60% are collected in the next month, and the remaining 10% are collected in the second month following the sale. 2 Monthly rental income received is $60,000. 3 Interest income of $10,000 will be received in May 2022. Cash Disbursements 4 The expected purchases are $150,000, $110,000 and $190,000 for the months of April, May and June 2022 respectively. The company pays all its purchases in the month of…