Herman Knorr, chief financial officer of Dallas Wireless, is responsible for the companys budgeting process. Knorrs staff

Question:

Herman Knorr, chief financial officer of Dallas Wireless, is responsible for the company€™s budgeting process. Knorr€™s staff is preparing the Dallas Wireless cash budget for 2015. A key input to the budgeting process is last year€™s statement of cash flows, which follows (amounts in thousands)

Herman Knorr, chief financial officer of Dallas Wireless, is responsible

Requirements
1. Prepare the Dallas Wireless cash budget for 2015. Date the budget simply €œ2015,€ and denote the beginning and ending cash balances as €œbeginning€ and €œending.€ Assume the company expects 2015 to be the same as 2014, but with the following changes:
a. In 2015, the company expects a 25% increase in collections from customers and a 26% increase in purchases of inventory.
b. There will be no sales of investments in 2015.
c. Dallas Wireless plans to issue no stock in 2015.
d. Dallas Wireless plans to end the year with a cash balance of$4,675.

Cash Budget
A cash budget is an estimation of the cash flows for a business over a specific period of time. These cash inflows and outflows include revenues collected, expenses paid, and loans receipts and payment.  Its primary purpose is to provide the...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting

ISBN: 978-0133427530

10th edition

Authors: Walter Harrison, Charles Horngren, William Thomas

Question Posted: