Inc, recently hired you One of your task is to analyze the cash budget for the c
ID: 2712174 • Letter: I
Question
Inc, recently hired you One of your task is to analyze the cash budget for the company to determine quarters of surplus/deficit. Therefore, you need to complete the information given below (Fill in the missing information: Payables period = 60 days ; receivables period = 45 days; wages, capital and Other = 20% of sales in a given quarter, Inventory purchases = 60% of next quarter?s sales the company maintains a minimum cash balance of 100 for speculative and precautionary purpose. Comment on your finding and describe how the company should proceed.Explanation / Answer
Cash Balance – Klausenheimer Inc Working Q1 Q2 Q3 Q4 Projected Sales [a] 600 630 660 720 Beginning Accounts Receivable [b ] 260 300 315 330 Cash Collection from Quarter Sales [C = a*45/90] 300 315 330 360 Total Cash Collected [d = b+c] 560 615 645 690 Ending Accounts Receivable [e = a+b-d] 300 315 330 360 Purchases [f = 60% * Next Quarter Sale] 378 396 432 450 Beginning Accounts Payable [g] 125 126 132 144 Disbursement from Quarter Purchase [h = f * 60/90] 252 264 288 300 Total Cash Disbursed [i=g+h] 377 390 420 444 Ending Accounts Payable [ j = f + g - i] 126 132 144 150 Wages , Taxes & Other [k = a*20%] 120 126 132 144 Interest Dividend [l] 100 100 100 100 Capital Expenditure [m] 0 200 0 0 Beginning Cash Balance [n] 50 100 100 100 Cash Inflow [o = d] 560 615 645 690 Cash Outflow [p = i+k+l+m] 597 816 652 688 Ending Cash Balance [q = n+o - p] 13 -101 93 102 Minimum Cash Balance 100 100 100 100 Surplus/Deficit -87 -201 -7 2