Explain how these answers were solved. Start at - Excess Deficency of cash, all the way to cash balance ending. Cash budget:Cash balance, beginning....Add cash collections.Total cash available.....Less cash disbursements:For inventory......For operating expenses..For equipment...Total disbursementsExcess (deficiency) of cashFinancing:Borrowings.Repayments.Interest*.Total financingCash balance, ending.* $3,000 x 1% x 3 =$6,000 x 1% x 2 =Total interestJanuary February$ 6,00064,00070,00045,15051,97519,400 20,2003,0008,00067,55080,1752,4503,000003,000$5,450March$ 5,450 $ 5,27574,000 82,000 220,00079,45087,275226,000$90120$210(725)6,00000Quarter$ 6,0006,000$5,27556,350 153,47520,60060,200011,00076,950224,6751,32510,3259,000(5,000)(210)0(5,000)(210)(5,210)$5,115 $5,1153,790 The following data relate to the operations of Picanuy Corporation, a wholesale distributor ofconsumer goods:a.b.C.d.e.f.g.h.Current assets as of December 31:Cash.Accounts receivableInventory..Buildings and equipment, net.Accounts payableCapital stock..Retained earnings.$6,000$36,000$9,800$110,885$32,550.$100,000.$30,135The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.)Actual and budgeted sales data are as follows:December (actual).January.February..March..April$60,000$70,000$80,000$85,000$55,000.Sales are 40% for cash and 60% on credit. Credit sales are collected in the month followingsale. The accounts receivable at December 31 are the result of December credit sales.Each month's ending inventory should equal 20% of the following month's budgeted cost ofgoods sold.One-quarter of a month's inventory purchases is paid for in the month of purchase; the otherthree-quarters is paid for in the following month. The accounts payable at December 31 arethe result of December purchases of inventory.Monthly expenses are as follows: commissions, $12,000; rent, $1,800; other expenses (exclud-ing depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is$2,400 for the quarter and includes depreciation on new assets acquired during the quarter.Equipment will be acquired for cash: $3,000 in January and $8,000 in February.Management would like to maintain a minimum cash balance of $5,000 at the end of eachmonth. The company has an agreement with a local bank that allows the company to borrowin increments of $1,000 at the beginning of each month, up to a total loan balance of $50,000.The interest rate on these loans is 1% per month, and for simplicity, we will assume that inter-est is not compounded. The company would, as far as it is able, repay the loan plus accumu-lated interest at the end of the quarter.moth

The cash budget is the estimate of inflows and outflows within a specific period, as well as the…

The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods: a. b. Current assets as of December 31: Cash. Accounts receivable Inventory Buildings and equipment, net. Accounts payable Capital stock. Retained earnings. $6,000 $36,000 $9,800 December (actual) $110,885 $32,550. $100,000. $30,135 The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.) Actual and budgeted sales data are as follows: $60.000 ---------

The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods: a. b. Current assets as of December 31: Cash. Accounts receivable Inventory Buildings and equipment, net. Accounts payable Capital stock. Retained earnings. $6,000 $36,000 $9,800 December (actual) $110,885 $32,550. $100,000. $30,135 The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.) Actual and budgeted sales data are as follows: $60.000 ---------

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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