Preparation of cash budget Sam and Suzy Sizeman need to prepare a cash budget for the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Preparation of cash budget Sam and Suzy Sizeman need to prepare a cash budget for the last quarter of 2016 to make sure they can cover their expenditures during the period. Sam and Suzy have been preparing budgets for the past several years and have been able to establish specific percentages for most of their cash outflows. These percentages are based on their take-home pay (that is, monthly utilities nor- mally run 5% of monthly take-home pay). The information in the following table can be used to create their fourth-quarter budget for 2016. Income Monthly take-home pay Expenses Housing Utilities $4,900 30% 5% Food 10% Transportation 7% Medical/dental .5% Clothing for October and November Clothing for December Property taxes (November only) Appliances 3% $440 11.5% 1% Personal care 2% Entertainment for October and November 6% Entertainment for December $1,500 Savings Other 7.5% 5% Excess cash 4.5% a. Prepare a quarterly cash budget for Sam and Suzy covering the months October through December 2016. b. Are there individual months that incur a deficit? c. What is the cumulative cash surplus or deficit by the end of December 2016? Preparation of cash budget Sam and Suzy Sizeman need to prepare a cash budget for the last quarter of 2016 to make sure they can cover their expenditures during the period. Sam and Suzy have been preparing budgets for the past several years and have been able to establish specific percentages for most of their cash outflows. These percentages are based on their take-home pay (that is, monthly utilities nor- mally run 5% of monthly take-home pay). The information in the following table can be used to create their fourth-quarter budget for 2016. Income Monthly take-home pay Expenses Housing Utilities $4,900 30% 5% Food 10% Transportation 7% Medical/dental .5% Clothing for October and November Clothing for December Property taxes (November only) Appliances 3% $440 11.5% 1% Personal care 2% Entertainment for October and November 6% Entertainment for December $1,500 Savings Other 7.5% 5% Excess cash 4.5% a. Prepare a quarterly cash budget for Sam and Suzy covering the months October through December 2016. b. Are there individual months that incur a deficit? c. What is the cumulative cash surplus or deficit by the end of December 2016?
Expert Answer:
Answer rating: 100% (QA)
Cash budget is the budget that prepares to estimate the expected rec... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Financial information related to Abbys Interiors for October and November of 2013 is as follows: a. Prepare balance sheets for Abbys Interiors as of October 31 and November 30, 2013. b. Determine the...
-
Financial information related to Montana Interiors for October and November 20Y8 is as follows: a. Prepare balance sheets for Montana Interiors as of October 31 and as of November 30, 20Y8. b....
-
Financial information related to Abby's Interiors for October and November of 20Y6 is as follows: a. Prepare balance sheets for Abby's Interiors as of October 31 and November 30, 20Y6. b. Determine...
-
Posting the entries from the sales journal to the accounts receivable subsidiary ledger should be done ______. a). at the end of each month b). on a weekly basis c). on a daily basis d). only at the...
-
Many mortgage lenders offer the flexibility of dividing a mortgage loan between a fixed-interest-rate portion and a variable-interest-rate portion. (A variable-rate mortgage is sometimes referred to...
-
The Wide World of Fluids article titled "Concrete canoes,". How much extra water does a 147-1b concrete canoe displace compared to an ultralightweight 38-1b Kevlar canoe of the same size carrying the...
-
Find the probability density function of the random variable \(Z\) in terms of the known density function \(p_{U}(u)\) when (a) \(z=a u+b\), where \(a\) and \(b\) are real constants. (b)...
-
Stevens Co. bought a machine on January 1, 2006 for $875,000. It had a $75,000 estimated residual value and a ten-year life. An expense account was debited on the purchase date. Stevens uses...
-
Blue Spruce, Inc. has the following production data for June: Completed and transferred out 41,000 units Ending work in process inventory 4,100 units The units in work in process inventory are 100%...
-
On January 1, 2010, Phelps Company purchased an 85% interest in Sloane Company for $955,000 when the retained earnings of Sloane Company were $150,000. The difference between implied and book value...
-
Review Complete and balance the following molecular equation. What type of reaction is this? Combination Decomposition, Single-Replacement, or Double-Replacement Ca O(S) +- HO (1)
-
On April 15, 2018, Ira filed her Form 1040, U.S. Individual Income Tax Return, for the 2017 taxable year. On her 2017 Form 1040, Ira reported a tax liability of $10,200 and withholding credits of...
-
A2Z Technologies is a tech start-up focused on developing new software applications. The company has recently completed a successful seed funding round and is now seeking to raise $25 million to...
-
When a band plays at the main stage of a 1,100-person festival, they sell 21 T-shirts. Their next festival gig involves playing on the main stage at a 2,900-person festival. How many T- shirts do...
-
Copper Lake Mines Ltd. is considering whether to rebuild its current access road to its mine at Old Town. It paid $50,000 to an engineering consultant to study its options. The consultant recommended...
-
Go to https://www.sec.gov/edgar/search/ and use more search options to search "Centurylink" in company name, find the result "10-K" and click, then click "open filing", then open the 10-K document....
-
Direct and inverse variation problem may be solved using aproportion, or by finding the "k" of variation. Compare andcontrast the two methods. (Direct and inverse variation)
-
Avatar Financials, Inc., located on Madison Avenue, New York City, is a company that provides financial advice to individuals and small- to mid-sized businesses. Its primary operations are in wealth...
-
The charges to Work in ProcessBaking Department for a period as well as information concerning production are as follows. The Baking Department uses the weighted average cost method, and all direct...
-
The following data were summarized from the accounting records for Statham Construction Company for the year ended November 30, 2012. Prepare divisional income statements for Statham...
-
Rehab Physical Therapy Inc. is planning its cash payments for operations for the second quarter (MarchMay), 2013. The Accrued Expenses Payable balance on March 1 is $36,000. The budgeted expenses for...
-
Sample size = 81, sample mean = 4.5 km, sample standard deviation = 3.1 km Assume that population means are to be estimated from the samples described. In each case, use the sample results to...
-
n = 100, x = 8.0 ft, s = 2.0 ft Assume that population means are to be estimated from the samples described. In each case, use the sample results to approximate the margin of error and 95% confidence...
-
Margin of error = \($5\), standard deviation = \($20\)
Study smarter with the SolutionInn App