e ong e.com/static/nb/indehtbld-593291&nbNodeld-2162709478elSBN-9781; 305635975
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e ong e.com/static/nb/indehtbld-593291&nbNodeld-2162709478elSBN-9781; 305635975 parentid-216271504 MINDTAP Assignment 15-Working Capital Management 8 Due on Nov 27 at 11 PM EST 6. Cash budget managers are meeting with the company's bank to renew their ine of credit and discuss their investment needs the companys operating cash budget for the last six months of the year They have prepared The following budget assumptions were used to construct the budget Wallace's total sales for each month were fist calculated in the sales budget and are reflected on the fs ine of the cash budget Walace's s collected from customers who take sales are made oe crede with terms of 2/10, net 30. Wallace's experience is that 20% is advantage of the dsount, 70% is conected in the second month, and tht last 10% is collected in the third month after the sale. The budget assumes that there are no bad . The cost of materials .verages SS%of Wallace's fnished poduct. The Prease are generaly mede onc malothen purchases ang 3 re would be seos cs 1,100 mman x 0,55, and this expenses include wages and salaries at iS% of sales, mormry rent of t40 maton, and other month in advance of the sale, and Wallace pays its suppliers in 30 days. Accendingly. Julysalesae forecasted at $1,100 amount would be pald in July Other expenses at % of sales. Estimated tax payments o, S59 malon and S61 milen·o reared to be paid on July 15 and October 15, respectively. In addition, $1,000 mition payment for a new plant must be made in September Assume that Wallace's targeted cash balance is $200, and the estimated cash on hand o July 1 is $188 Unt the ing rmation to fil in misang omounts in thg folowing cash budget. Wallace Company Cash Budget For the Six Months Ended December 31, Year ($ millions) O Type here to searchExplanation / Answer
may
June
july
august
september
october
november
december
credit sales
950
980
1000
1010
1030
1050
1080
1100
credit purchase
550
556
567
578
594
605
1010*55%
cash receipt
july
august
september
october
november
december
collection from this month sale
1000*20%*98%
196
198
202
206
212
216
collection from previous month sales
980*70%
686
700
707
721
735
756
collection from two months previous
950*10%
95
98
100
101
103
105
total cash receipts
977
996
1009
1028
1050
1077
cash disbursement
payment for credit purchase
1080*55%
550
556
567
578
594
605
wages and salaries
1050*15%
150
152
155
158
162
165
rent
40
40
40
40
40
40
other expenses
1050*5%
50
51
52
53
54
55
TAXES
59
61
payment for plant construction
1000
total cash disbursement
849
799
1814
890
850
865
net cash flow
receipts-disbursement
128
197
-805
138.00
200
212
beginning cash balance
188
316
513
-292
-154
46
ending cash balance
316
513
-292
-154
46
258
target minimum cash balance
200
200
200
200
200
200
surplus/shortfall cash
116
313
-92
-354
-154
58
may
June
july
august
september
october
november
december
credit sales
950
980
1000
1010
1030
1050
1080
1100
credit purchase
550
556
567
578
594
605
1010*55%
cash receipt
july
august
september
october
november
december
collection from this month sale
1000*20%*98%
196
198
202
206
212
216
collection from previous month sales
980*70%
686
700
707
721
735
756
collection from two months previous
950*10%
95
98
100
101
103
105
total cash receipts
977
996
1009
1028
1050
1077
cash disbursement
payment for credit purchase
1080*55%
550
556
567
578
594
605
wages and salaries
1050*15%
150
152
155
158
162
165
rent
40
40
40
40
40
40
other expenses
1050*5%
50
51
52
53
54
55
TAXES
59
61
payment for plant construction
1000
total cash disbursement
849
799
1814
890
850
865
net cash flow
receipts-disbursement
128
197
-805
138.00
200
212
beginning cash balance
188
316
513
-292
-154
46
ending cash balance
316
513
-292
-154
46
258
target minimum cash balance
200
200
200
200
200
200
surplus/shortfall cash
116
313
-92
-354
-154
58
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