Piano Man, Inc., has a 30-day average collection period and wants to maintain a

Question

Piano Man, Inc., has a 30-day average collection period and wants to maintain a minimum cash balance of $20 million, which is what the company currently has on hand. The company currently has a receivables balance of $187 million and has developed the following sales and cash disbursement budgets in millions:

Complete the following cash budget for the company. (Do not include the dollar signs ($). Negative amounts should be indicated by a minus sign. Enter your answers in millions of dollars. Round your answers to the nearest whole dollar amount (e.g., 32).)

Piano Man, Inc., has a 30-day average collection period and wants to maintain a minimum cash balance of $20 million, which is what the company currently has on hand. The company currently has a receivables balance of $187 million and has developed the following sales and cash disbursement budgets in millions:

Explanation / Answer

Q1 Q2 Q3 Q4 Beginning Receivables                 187.00                     360.00                     432.00                     513.00 Sales                   360.00                     432.00                     513.00                     477.00 Cash collections                 187.00                     360.00                     432.00                     513.00 Ending Receivables                 360.00                     432.00                     513.00                     477.00 Opening Cash                    20.00                  (133.00)                  (181.00)                  (386.00) Disbursements                 320.00                     388.00                     617.00                     391.00 Minimum Cash                    20.00                       20.00                       20.00                       20.00 Closing Cash               (133.00)                  (181.00)                  (386.00)                  (284.00)

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