# a. Expand the cash budget you created in Problem 10.4 to include a row for expected cash

## Question:

a. Expand the cash budget you created in Problem 10.4 to include a row for expected cash outflows equal to 77% of the current month’s sales.

b. Also add a row to calculate the amount of cash that needs to be borrowed, in order to maintain a minimum cash balance of $50,000 at the end of each month. c. Add another row to show the cash inflow from borrowing. d. Add another row to show the cumulative amount borrowed. e. Add another row to show the amount of the loan that can be repaid, being sure to maintain a minimum ending balance of$50,000 each month.

Problem 10.4

a. Create a 12-month cash budget in Excel using the following assumptions:
• Initial sales of $5,000,000 with forecasted monthly growth of 1% • 40% of each month’s sales for cash; 30% collected the following month; 20% collected 2 months later; 8% collected 3 months later; and 2% never collected • Initial cash balance of$350,000

b. Add a “spinner” to your spreadsheet that will enable you to easily change fore¬ casted monthly sales growth to range from 0.5% to 1.5% in increments of 0.1%.

c. Add a scroll bar to your spreadsheet that will let you modify the amount of ini¬ tial sales to vary from $4,000,000 to$6,000,000 in increments of \$100,000.

d. Design appropriate data entry and processing controls to ensure spreadsheet accuracy.

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