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Cash Budgeting

Finance question

The ABC Corporation's budgeted monthly sales are $4,000. In the first month, 40% of its customers pay and take the 3% discount. The remaining 60% pay in the month following the sale and don't receive a discount. ABC's bad debts are very small and are excluded from this analysis. Purchases for next month's sales are consta

Prepare a Cash Budget for Oxford Company

The Oxford Company has budgeted sales revenues as follows:   July August September Credit sales $30,000 $24,000 $18,000 Cash sales 18,000 51,000 39,000 Total sales $48,000 $75,000 $57,000 (Please see attached file for fully-formatted data tables.)   Past exper

Capital Budgeting analysis for James LaGrande and Krispie Krinkles

James LaGrande had recently been appointed controller of the breakfast cereals division of a major food company. One of Jim's first assignments was to prepare the financial analysis for a new cold cereal, Krispie Krinkles. Mr. LaGrande discussed the product with the food lab that had designed it, with the market research dep

Monthly Cash Budget: Cyrus Brown Manufacturing

1 Excel Spreadsheet and a 1-2 page Word doc Details: To avoid any uncertainty regarding his business' financing needs at the time when such needs may arise, Cyrus Brown wants to develop a cash budget for his latest venture: Cyrus Brown Manufacturing (CBM). He has estimated the following sales forecast for CBM over the next

Accounting - multiple choice

1. Sarbanes-Oxley legislation is not concerned with: a) Improving internal control b) Corporate governance c) Monitoring of managers d) Disclosure practices of private companies 2. Sales total $360,000 when variable costs total $270,000 and fixed costs total $80,000. The break-even point in sal

Accounting: Sales Budget and Cash Receipts

Scenario: Dorough Pointers Inc. expects to begin operations on January 1, 2009; it will operate as a specialty sales company that sells laser points over the Internet. Dorough expects sales in January 2009 to total $120,000 and to increase 10 percent per month in February and March. All sales are on account. Dorough expects to c

Preparation of a cash budget

(Preparation of a cash budget) projected sales for the first eight months of 2010 as follows: January $100,000 April $300,000 July $200,000 February 120,000 May 275,000 August 180,000 March 150,000 June 200,000 collects 20 percent of its sales in the month of the sale, 50 percent in the month following the sale, and the r

Preparation of a Cash Budget Under Two Alternatives

Preparation of a Cash Budget Under Two Alternatives Each autumn, as a hobby, Suzanne De Angelo weaves cotton place mats to sell at local crafts shop. The mats sell for $ 20 per set of four. The shop charges a 10% commission and remits the net proceeds to De Angelo at the end of December. De Angelo has woven and

Budgets vs rolling forecasts, budget tools, inputs to master budgets

1. According to information posted by the Oregon Society of Certified Public Accountants, the current trend for businesses in relation to budgeting is changing a direction to "flexible budget tools." The information posted also indicates that "more companies are abandoning budgets in favor of rolling forecasts." In essence mos

Cash Budget for Cyrus Brown to Forecast Next 9 Months

Excel Spreadsheet and a Word doc Details: Please read the relevant parts of your textbook, which refer to cash flow and financial planning. To avoid any uncertainty regarding his business' financing needs at the time when such needs may arise, Cyrus Brown wants to develop a cash budget for his latest venture: Cyrus Brown

CASH FLOW PLANNING IN BORDEAUX The year 2000 was considered the greatest year for wine in the Bordeaux region of France since at least 1982, and the winemakers could look forward to selling their wines for record prices, but there was one catch: these wines would not be released to consumers until late in 2003. The winemakers had incurred most of their costs in 2000 when the vines were being tended and the grapes were being processed into wine. In many industries this would mean the companies would have to finance their inventories for almost four years--not an insignificant cost. A company must finance its inventory by either borrowing the money, which results in out-of-pocket interest expense, or using its own funds. The second option generates an opportunity cost resulting from the interest revenue that could have been earned if these funds were not being used to finance the inventory. To address this potential cash flow problem, many of the winemakers in Bordeaux offer some of their wines for sale as futures. That means the wines are purchased and paid for while they are still aging in barrels in France. Selling wine as futures reduces the time inventory must be financed from four years to only one to two years. Of course there are other types of costs in such deals. For one, the wines must be offered at lower prices than they are expected to sell for upon release. The winemakers have obviously decided this cost is less than the cost of financing inventory through borrowed money, or they would not do it. Companies in other industries use similar techniques to speed up cash flow, such as factoring of accounts receivable. A major reason entities prepare cash budgets is to be sure they will have enough cash on hand to pay bills as they come due. If the budget indicates a temporary cash flow deficit, action must be taken to avoid the problem, and revised budgets must be prepared. Budgeting is not a static process.

Read the Focus On International Issues on p. 1,025 in Fundamental Financial & Managerial Accounting Concepts. What other businesses may use this technique or a similar technique to speed up cash flow? What are some of the risks involved? What are the benefits? FOCUS ON INTERNATIONAL ISSUES CASH FLOW PLANNING IN BORDEAUX The

Sales, Production, Purchases, and Cash Budgets

Sales, Production, Purchases, and Cash Budgets Rolen Inc. is in the process of preparing the fourth quarter budget for 2010, and the following data have been assembled: The company sells a single product at a price of $25.00 per unit. The estimated sales volume for the next six months is as follows: September 13,000 uni

Benefits of depreciation, cash budgeting, and cash flow

What is the benefit of depreciation? What are some of the issues for a financial manager in reviewing pro forma financial statements? Is cash budgeting necessary? Why or why not? Simplify the differences between cash flow, operating cash flow and free cash flow.

Cash Budget Needed

To avoid any uncertainty regarding his business' financing needs at the time when such needs may arise, Cyrus Brown wants to develop a cash budget for his latest venture: Cyrus Brown Manufacturing (CBM). He has estimated the following sales forecast for CBM over the next 9 months: March $250,000 April $27

Short Report on Cash Budgeting Problem

1. You work for Keafer Inc., a small, family-owned manufacturer of custom cardboard boxes. Up until now, payables and receivables were handled haphazardly with little planning. You have been hired to apply the skills you learned in business school to institute some formality to the process. Currently the firm has a cash balance

Description of Accounting: Cash budget

Please help with the following problem. Signal Florists (SF) operates a retail flower shop. Their sales for October total $5,000. They have projected revenue for the next three months as follows: November $12,000 December $23,000 January $8,000 February $10,000 SF allows its customers a 3% discount if the

cash budget

Use the following information to answer questions # 23 through 28 For each of the transactions listed below, indicate the effect it will have on the cash budget: P = Positive effect; N = Negative effect; 0 = No effect (Hint: how does the transaction below affect cash flow, in the current period, with only the amount of inform

Budget Lesson in Excel

See attached excel file ---------------------- INSTRUCTIONS: YOU ARE PREPARING THE BUDGET FOR DELUXE LAWNMOWER COMPANY. BELOW IS THE FIRST PART OF THE SALES BUDGET. COMPLETE THIS BUDGET. SALES BUDGET SALES PRICE OF THE DELUXE MODEL IS $250 DELUXE LAWNMOWER USE A FORMULA IN OR FILL IN A N

Reasons for holding cash and the need for cash budgeting

I. Winner Where She Goes, Inc. is considering an investment of $800,000 in a new equipment line for boning and packaging beef products. The equipment has an expected life of 5 years. Sales are expected to be 900,000 units per year, at a price of $3 per unit. Fixed costs excluding depreciation are $300,000 per year, and variable

Capital Budget Evaluation Techniques for Guillermo Furniture

See attached file for data. Guillermo Furniture, a company that manufactures midgrade and high-end sofas, has just hired you as an accountant. The owner, Guillermo Navallez, has assigned you the tasks of determining which decisions provide the greatest returns. Recommend a course of action based on a capital budget evaluat

Accounting.

PLEASE SHOW CALCULATIONS 1. A firm expects to sale 25,000 units of its product at $11 per unit. Pretax income is predicted to be $60,000. If the variable costs per unit are $6, total fixed costs must be: 2. Management anticipates fixed costs of $72,500 and variable costs equal to 40% of sales. What will pretax income equ

Standard cost, cash collections, key to entire operating budget.

13. A standard cost or production standard that assumes maximum operating conditions and 100% efficiency at all times is called a(n): a. ideal standard. b. past experience standard. c. attainable standard. d. average standard. 14. A key to estimating an accurate amount of cash to be collected from sales is: a. the ac

Cash Budget and Cost Variance Analysis

Please see the attached file for better format. Problem 5: Preparation of a Cash Budget The sales budget of Mulls Company for the fourth quarter of 20X6 is as follows: October November December Sales $91,000 $76,000 $108,000 Sales are 20% cash, 80% credit

Cyrus Brown Manufacturing: Cash Budget for Nine Month Period

To avoid any uncertainty regarding his business' financing needs at the time when such needs may arise, Cyrus Brown wants to develop a cash budget for his latest venture: Cyrus Brown Manufacturing (CBM). He has estimated the following sales forecast for CBM over the next 9 months: March $250,000 April $