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Category: Business and Industry
Date Submitted: 08/26/2012 06:16 PM
ACCT 504 Sample Case Study 3 On Cash Budgeting Solution
1.
CAMBRIDGE COMPANY
Cash Budget
For the Two Months of February and March
Feb Mar
Beginning cash balance $15,000 $15,000
Add: Receipts
Collections from customers 39,600 30,600
Sale of plant assets 18,525
Sale of new common stock 25,275
Cash sales 76,500 58,500
Total receipts 134,625 114,375
Total available cash 149,625 129,375
Less: Disbursements
Purchases of inventory 85,500 53,100
Operating expenses 10,125 10,125
Selling and administrative expenses 18,750 18,750
Dividends 28,500
Equipment purchase 9,000
Total disbursements 142,875 90,975
Excess (deficiency) of available cash over disbursements 6,750 38,400
Financing
Borrowings 8,250
Repayments (8,415)*
Ending cash balance $15,000 $29,985
*8,250 × 12% × 2/12 = $165 + $8,250 = $8,415
Schedule of Expected Collections from Customers
Credit sales Feb Mar
Jan (45,000 × 40%) $18,000
Feb ($36,000 x 60%), Mar ($36,000 x 40%) 21,600 $ 14,400
Mar ($27,000 × 60%) 16,200
Total collections $39,600 $30,600
Schedule of Expected Payments for Purchase of Inventory
Inventory purchases Feb Mar
Jan ($97,500 x 60%) $58,500
Feb ($67,500 x 40%), Mar ($67,500 x 60%) 27,000 $40,500
Mar ($31,500 x 40%) 12,600
Total payments $85,500 $53,100
Oxford Company
Cash Budget
For the Two Months of August and September
August September
Beginning cash balance $10,000 $10,000
Add: Receipts
Collections from customers 26400 20400
Sale of plant assets 12,350
Sale of new common stock 16,850
Cash sales 51000 39000
Total receipts 89750 76250
Total available cash 99750 86250
Less: Disbursements...