Ayers Communications, Inc., is preparing its cash budget for the year ending December 31, 2017. Ayers ended

Question:

Ayers Communications, Inc., is preparing its cash budget for the year ending December 31, 2017. Ayers ended 2016 with cash of $62 million and managers need to keep a cash balance of at least $71 million for operations.

Collections from customers are expected to total $11,339 million during 2017, and pay¬ments for the cost of services and products should reach $6,193 million. Operating expense payments are budgeted at $2,544 million.

During 2017, Ayers expects to invest $1,823 million in new equipment and sell older assets for $132 million. Debt payments scheduled for 2017 will total $552 million. The company forecasts net income of $893 million for 2017 and plans to pay dividends of $355 million.

Prepare Ayers Communications' cash budget for 2017. Will the budgeted level of cash receipts leave Ayers with the desired ending cash balance of $71 million, or will the company need additional financing? If so, how much?

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...