Wonderland Manufacturing produces a variety of industrial valves. The company is preparing its cash budget for...

 

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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

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All amounts are in Wonderland Manufacturing Combined Cash Budget for the months of July through Sept... View the full answer