The accountant for Erica’s Dress Shop prepared the following cash budget. Erica’
ID: 2452673 • Letter: T
Question
The accountant for Erica’s Dress Shop prepared the following cash budget. Erica’s desires to maintain a cash cushion of $24,000 at the end of each month. Funds are assumed to be borrowed and repaid on the last day of each month. Interest is charged at the rate of 1 percent per month. Required a. Complete the cash budget by filling in the missing amounts. (Any repayments should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.)
Determine the amount of net cash flows from operating activities Erica’s will report on the third quarter pro forma statement of cash flows. (Enter any cash outflows with a minus sign. Round intermediate calculations and final answer to the nearest whole dollar amount.)
b.Determine the amount of net cash flows from operating activities Erica’s will report on the third quarter pro forma statement of cash flows. (Enter any cash outflows with a minus sign. Round intermediate calculations and final answer to the nearest whole dollar amount.)
Determine the amount of net cash flows from financing activities Erica’s will report on the third quarter pro forma statement of cash flows. (Enter any cash outflows with a minus sign. Round intermediate calculations and final answer to the nearest whole dollar amount.)
The accountant for Erica's Dress Shop prepared the following cash budget. Erica's desires to maintain a cash cushion of $24,000 at the end of each month. Funds are assumed to be borrowed and repaid on the last day of each month. Interest is charged at the rate of 1 percent per month Required a. Complete the cash budget by filling in the missing amounts. (Any repayments should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.) Cash Budget Jul August September Section 1: Cash receipts Beginning cash balance Add cash receipts 52,500 24,000 24,000 200,000 220,000260,600 252,500 244,000 284,600 Total cash available Section 2: Cash payments For inventory purchases For S&A; expenses For interest expense 184,152 71,432 175,526 150,230 64,500 70,560 Total budgeted disbursements 240,026 Section 3: Financing activities Surplus (shortage) Borrowing (repayments) 12,474 11,526 Ending cash balance $ 24,000$ 24,000$ 24,000Explanation / Answer
Answer:A
Interest=11526*1%=115.26
=(11526+905.26)*1%=124.3126
Answer:b Cash flow from operating activities is equal to total (i.e., sum of the monthly amounts) cash receipts from customers minus the total (i.e., sum of the monthly amounts) of cash payments for inventory, S&A expense, and interest [i.e., $680,600 – ($240026+ $220905.26+ $255708.3126) = ($36,040) net cash outflow.]
Answer:c Cash flow from financing activities is the amount borrowed less repayments (i.e., $11,526 + $905.26 – $4,891.6874= $7,539.5726 net cash inflow.)
Cash Budget July August September QTR Cash receipts: Beg. Cash balance 52500 24000 24000 100500 Add: cash receipts 200000 220000 260600 680600 Total cash available 252500 244000 284600 781100 Cash Payments: For inventory purchases 175526 150230 184152 509908 For S&A expenses 64500 70560 71432 206492 For interest expenses 0 115.26 124.3126 239.5726 Total budgeted disbursements 240026 220905.26 255708.3126 716639.6 Financing activities: Surplus (Shortage) 12474 23094.74 28891.6874 64460.43 Borrowing (Repayments) 11526 905.26 -4891.6874 7539.573 Ending cash balance 24000 24000 24000 72000Related Questions
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