Wonderland Manufacturing produces a variety of industrial valves. The company is preparing its cash budget for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Wonderland Manufacturing produces a variety of industrial valves. The company is preparing its cash budget for the upcoming third quarter. The following transactions are expected to occur: (Click the icon to view the expected transactions.) Requirement 1. Prepare a combined cash budget for Wonderland Manufacturing for the third quarter, with a column for each month and for the quarter total. www g www-- Wonderland Manufacturing O More Info Combined Cash Budget For the Months of July through September a. Cash collections from sales in July, August, and September, are projected to be $91,000, S152,000, and $126,000 respectively. b. Cash payments for the upcoming third quarter are projected to be $141,000 in July, $105,000 in August, and $139,000 in September, c. The cash balance as of the first day of the third quarter is projected to be $39,000. d. Wonderland Manufacturing has a policy that they must maintain a minimum cash balance of $24,000. July August September Quarter Beginning balance of cash Cash collections Total cash available The company has a line of credit with the local bank that allows it to borrow funds in months that it would not otherwise have a minimum balance of $24,000. If the company has more than $24,000 at the end of any given month, it uses the excess funds to pay off any outstanding line of credit balance. Each month, Wonderland Manufacturing pays interest on the prior month's line of credit ending balance. The actual interest rate that Wonderland Manufacturing will pay floats since it is tied to the prime rate. However, the interest rate paid during the budget period is expected to be 2% of the prior month's line of credit ending balance (if the company did not have an outstanding balance at the end of the prior month, then Wonderland Manufacturing does not have to pay any interest). All line of credit borrowings are taken or paid off on the first day of the month. As of the first day of the third quarter, Wonderland Manufacturing did not have a balance on its line of credit. Cash payments Ending cash balance before financing Financing: Borrowings Repayments Interest Payments Print Done Ending cash balance Wonderland Manufacturing produces a variety of industrial valves. The company is preparing its cash budget for the upcoming third quarter. The following transactions are expected to occur: (Click the icon to view the expected transactions.) Requirement 1. Prepare a combined cash budget for Wonderland Manufacturing for the third quarter, with a column for each month and for the quarter total. www g www-- Wonderland Manufacturing O More Info Combined Cash Budget For the Months of July through September a. Cash collections from sales in July, August, and September, are projected to be $91,000, S152,000, and $126,000 respectively. b. Cash payments for the upcoming third quarter are projected to be $141,000 in July, $105,000 in August, and $139,000 in September, c. The cash balance as of the first day of the third quarter is projected to be $39,000. d. Wonderland Manufacturing has a policy that they must maintain a minimum cash balance of $24,000. July August September Quarter Beginning balance of cash Cash collections Total cash available The company has a line of credit with the local bank that allows it to borrow funds in months that it would not otherwise have a minimum balance of $24,000. If the company has more than $24,000 at the end of any given month, it uses the excess funds to pay off any outstanding line of credit balance. Each month, Wonderland Manufacturing pays interest on the prior month's line of credit ending balance. The actual interest rate that Wonderland Manufacturing will pay floats since it is tied to the prime rate. However, the interest rate paid during the budget period is expected to be 2% of the prior month's line of credit ending balance (if the company did not have an outstanding balance at the end of the prior month, then Wonderland Manufacturing does not have to pay any interest). All line of credit borrowings are taken or paid off on the first day of the month. As of the first day of the third quarter, Wonderland Manufacturing did not have a balance on its line of credit. Cash payments Ending cash balance before financing Financing: Borrowings Repayments Interest Payments Print Done Ending cash balance
Expert Answer:
Answer rating: 100% (QA)
All amounts are in Wonderland Manufacturing Combined Cash Budget for the months of July through Sept... View the full answer
Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
Posted Date:
Students also viewed these accounting questions
-
The St. Germaine Company is preparing its cash payments budget. The following items relate to cash payments the company anticipates making during the second quarter of the upcoming year. a. The...
-
Duluth Company is preparing its cash budget for December. The following information is available concerning its accounts receivable: Estimated credit sales for December . . . . . . . . . . . . . . ....
-
Doreen Company is preparing its cash budget for the month of May. The following information is available concerning its accounts receivable: Actual credit sales for March .................$120,000...
-
The following data were gathered to use in reconciling the bank account of Torres Company: Balance per bank ................................... $14,385 Balance per company records ...................
-
A and B are independent events, and P(A) = 0.7 and P(B) = 0.4. Find P(A and B).
-
Obtain the power series expansions of (a) 1 (1-x) (b) 1 (1-x)(1 + 3x) (c) In(1 + x) 1 + x
-
Outline the contribution that the techniques of work measurement and standard costing can make to budgetary control. To what extent are control budgets suitable for planning purposes ?
-
Create, Inc., produces inventory in its foreign manufacturing plants for sale in the United States. Its foreign manufacturing assets have a tax book value of $5 million and a fair market value of $15...
-
The deben, an ancient Egyptian unit of weight, is approximately equal to 3.21 ounces. It is also equivalent to 12 smaller Egyptian units called shematies. Based on these relationships, 488 shematies...
-
1) Value of agility is a key parameter when deciding TCO/ROI. True or False 2) Select the one which is not a domain factor for the interconnected systems in Cloud operations A) User domain B)...
-
Question 4 Marc, & married taxpayer, earns 5640,000 in taxable income and $8,300 in interest from an investment in city of Birmingham bonds. Using the U.S. tax rate schedule for year 2022, what is...
-
How to close the instructional gap in elementary school? How to solve transient problem in a school? How to close the academic gap in elementary school?
-
What are the different types, benefits and challenges of fieldwork?
-
Problem # 2 Cost incurred Installation services Supplies 45.00 Labor 445.00 Designer services Supplies Labor 10.00 200.00 Cleanup Janitorial service cost 35.25 Service overhead for installation...
-
Q2. Elaborate on the following diagrams and graphs: (what why and when they are used)? A. First Diagram. Normal Prioritized Features List Fast Tracking Crashing B. Second Diagram. 1 2 3 68 Selected...
-
How has telemedicine and mobile application impacted positive change in the United States healthcare and how this has led to increased interest in the use of operations management tools and...
-
Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it purchases and installs on behalf of its clients. The firm's...
-
Chris Zulliger was a chef at the Plaza Restaurant in the Snowbird Ski Resort in Utah. The restaurant is located at the base of a mountain. As a chef for the Plaza, Zulliger was instructed by his...
-
What are the limitations of joint product cost allocation?
-
Each summer the Harbour Report (www.oliverwyman.com/ow/automotive.htm) rates the productivity of the major automakers, including the Detroit Big 3, Toyota, Honda, and many other brands. The report is...
-
Studemeir Paint & Floors (SPF) has experienced net operating losses in its Other Flooring Products line during the last few periods. SPFs management team thinks that the store will improve its...
-
Bolivia currently has a nominal 1-year risk-free interest rate of 40 percent, which is primarily due to the high level of expected inflation. The U.S. nominal 1-year risk-free interest rate is 8...
-
Effect of September 11 on Forward Rate Forecasts. The September 11, 2001, terrorist attack on the United States was quickly followed by lower interest rates in the United States. How would this...
-
Assume that interest rate parity exists and it will continue to exist in the future. Assume that interest rates of the United States and the United Kingdom vary substantially in many periods. You...
Study smarter with the SolutionInn App