Eagle Security Pte Ltd is a leading security company in Singapore. As at 1 January 2023,...
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Eagle Security Pte Ltd is a leading security company in Singapore. As at 1 January 2023, its cash at bank balance is $250,000. The company's policy is to maintain a minimum cash balance of $100,000. The company is developing a cash budget for January, February and March 2023, and the following information was gathered: Cash Receipts Fee revenue for November and December 2022 are $210,000 and $170,000 respectively. The forecasted billings for January, February and March 2023 are $180,000, $210,000 and $260,000 respectively. Historically, 10% of the company's billings are in cash, 70% are collected in the next month, and the remaining 20% are collected in the second month following the sale. Dividend income of $C0,000 will be received in February 2023. (C is the 6th digit of your admin number). 2 (Use $60,000 if the 6th digit of your admin number is 0) 3 Interest income of $2,000 will be received in March 2023. Cash Disbursements 4 Rental payment was $10,000 per month. In March 2023, this would be increased to $15,000 per month. 5 Fixed monthly salaries paid is $110,000. Variable salaries are paid at D% of the previous month's fee revenue. (D is the 7th digit of your admin number). (Use 7% if the 7th digit of your admin number is 0) Payment for new security equipment amounting to $350,000 is scheduled for payment in March 2023. Use the following templates to prepare the cash budget for January, February and March 2023: a) Projected Cash Receipts Receipts Fee revenue Collections from billings: Within same month (10%) Lag 1 month (70%) Lag 2 months (20%) Dividend income ($C0,000) Interest income Total Cash Receipts b) Projected Cash Disbursements Disbursements Rental Salaries Variable salaries (D%) Equipment Total Cash Disbursements c) Cash Budget Total cash receipts Less: Total cash. disbursements Net cash flow Add: Beginning cash Ending cash Minimum cash Dec Nov $ $ 210,000 170,000 Required Financing Excess Cash Balance Jan $ Jan $ Feb $ 180,000 210,000 Jan $ Feb $ Feb $ Mar $ 260,000 Mar $ Mar $ (13 marks) (8 marks) (9 marks) Eagle Security Pte Ltd is a leading security company in Singapore. As at 1 January 2023, its cash at bank balance is $250,000. The company's policy is to maintain a minimum cash balance of $100,000. The company is developing a cash budget for January, February and March 2023, and the following information was gathered: Cash Receipts Fee revenue for November and December 2022 are $210,000 and $170,000 respectively. The forecasted billings for January, February and March 2023 are $180,000, $210,000 and $260,000 respectively. Historically, 10% of the company's billings are in cash, 70% are collected in the next month, and the remaining 20% are collected in the second month following the sale. Dividend income of $C0,000 will be received in February 2023. (C is the 6th digit of your admin number). 2 (Use $60,000 if the 6th digit of your admin number is 0) 3 Interest income of $2,000 will be received in March 2023. Cash Disbursements 4 Rental payment was $10,000 per month. In March 2023, this would be increased to $15,000 per month. 5 Fixed monthly salaries paid is $110,000. Variable salaries are paid at D% of the previous month's fee revenue. (D is the 7th digit of your admin number). (Use 7% if the 7th digit of your admin number is 0) Payment for new security equipment amounting to $350,000 is scheduled for payment in March 2023. Use the following templates to prepare the cash budget for January, February and March 2023: a) Projected Cash Receipts Receipts Fee revenue Collections from billings: Within same month (10%) Lag 1 month (70%) Lag 2 months (20%) Dividend income ($C0,000) Interest income Total Cash Receipts b) Projected Cash Disbursements Disbursements Rental Salaries Variable salaries (D%) Equipment Total Cash Disbursements c) Cash Budget Total cash receipts Less: Total cash. disbursements Net cash flow Add: Beginning cash Ending cash Minimum cash Dec Nov $ $ 210,000 170,000 Required Financing Excess Cash Balance Jan $ Jan $ Feb $ 180,000 210,000 Jan $ Feb $ Feb $ Mar $ 260,000 Mar $ Mar $ (13 marks) (8 marks) (9 marks)
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Based on the information provided heres how to fill out the cash budget for January February and March 2023 a Projected Cash Receipts To calculate the ... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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