Monette Company is a manufacturer that is preparing its budget for the upcoming quarter. Management has...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Monette Company is a manufacturer that is preparing its budget for the upcoming quarter. Management has prepared the following summary of it budgeted cash flows: September $122.000 July August Total cash receipts Total cash disbursements $96,000 $159,000 $149,000 $105.000 $133,000 The cash balance as of the first day of the third quarter is projected to be $32,000. The company requires a minimum cash balance of $25,000 and may borrow any amount needed from a local bank at a monthly interest rate of 2%. If the company has more than its minimum balance at the end of any given month, it uses the excess funds to pay off any outstanding loan balance. Each month, Monette pays interest on the prior month's ending loan balance. All borrowings, interest payments and pay offs happen on the first day of the month. As of the first day of the third quarter, Monette did not have a loan balance. For simplicity, assume that interest is not compounded. Required: Prepare the company's cash budget for the third quarter, with a column for each month and for the quarter total. Monette Company is a manufacturer that is preparing its budget for the upcoming quarter. Management has prepared the following summary of it budgeted cash flows: September $122.000 July August Total cash receipts Total cash disbursements $96,000 $159,000 $149,000 $105.000 $133,000 The cash balance as of the first day of the third quarter is projected to be $32,000. The company requires a minimum cash balance of $25,000 and may borrow any amount needed from a local bank at a monthly interest rate of 2%. If the company has more than its minimum balance at the end of any given month, it uses the excess funds to pay off any outstanding loan balance. Each month, Monette pays interest on the prior month's ending loan balance. All borrowings, interest payments and pay offs happen on the first day of the month. As of the first day of the third quarter, Monette did not have a loan balance. For simplicity, assume that interest is not compounded. Required: Prepare the company's cash budget for the third quarter, with a column for each month and for the quarter total.
Expert Answer:
Answer rating: 100% (QA)
ANSWER Description Monette Company Beginning balance Cash rec... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
The Plastic Lumber Company, Inc., (PLC) is a manufacturer that takes in post- consumer plastics (i. e., empty milk jugs) and recycles those plastics into a plastic lumber that can be used to build...
-
The Plastic Lumber Company, Inc., (PLC) is a manufacturer that takes in post- consumer plastics (i. e., empty milk jugs) and recycles those plastics into a plastic lumber that can be used to build...
-
The Plastic Lumber Company, Inc., (PLC) is a manufacturer that takes in post- consumer plastics (i. e., empty milk jugs) and recycles those plastics into a plastic lumber that can be used to build...
-
In the United States, a principal responsibility for preserving endangered species (e.g., a pair of endangered birds that chooses to nest on private land) and the costs of exercising that...
-
TelTec Inc. stock is expected to sell for $10 per share four years from now. TelTec has just paid a dividend of 50 cents per share. Dividends are expected to grow at a rate of 5 percent per year for...
-
Consider the following steady, three-dimensional velocity field: Calculate the vorticity vector as a function of space (x, y, z). V = (u, v, w) (3.0+ 2.0x - y)i + (2.0x2.0y)j + (0.5xy)k
-
A vertical jet of water leaves a nozzle at a speed of \(10 \mathrm{~m} / \mathrm{s}\) and a diameter of \(20 \mathrm{~mm}\). It suspends a plate having a mass of \(1.5 \mathrm{~kg}\) as indicated in...
-
Kingston, Inc. management is considering purchasing a new machine at a cost of $4,133,250. They expect this equipment to produce cash flows of $814,322, $863,275, $937,250, $1,017,112, $1,212,960,...
-
A spherical shaped building is 112 meters in height and 157 m in diameter in outer dimensions. The thickness of the reinforced concrete shell of the sphere is 25 cm and the effective thermal...
-
Presented below is information related to the sole proprietorship of Helen Archer, attorney. Legal service revenue2020 ...........$330,000 Total expenses2020 ........................211,000 Assets,...
-
Ith care services to Zack Millman Clinic is seeking to provide plus $20 per athlete per month on a nine-month basis. The high schools jointly offered to pay high schools in the area. Zack Millman...
-
True or False: In determining the optimum replacement interval, it is necessary to assume negligible salvage values.
-
True or False: If the optimum replacement interval for an over-the-road tractor is 4 years and the after-tax MARR is increased from 9% to 12%, then the optimum replacement interval for the next...
-
Cecils Manufacturing is considering producing a new product. The sales price would be \($10.25\) per unit. The cost of the equipment is \($100,000.\) Operating and maintenance (O&M) costs are...
-
In Problem 106, what uniform annual series over [4,7] will be equivalent to the cash flow profile if money is worth 6 percent compounded annually? Data from problem 106 Consider the following cash...
-
True or False: Benefit-cost analysis is primarily used by regulated utilities.
-
VA A = XB 10 m/s 30 B h C X :The x-component of particle's velocity is Vx = 10 m/s O Vx= 20 sin(30) m/s O Vx = 20 m/s Vx - 20 cos(30) m/s O O
-
Tell whether the angles or sides are corresponding angles, corresponding sides, or neither. AC and JK
-
During World War II, the U.S. military was studying its combat-tested fighter planes to determine the parts of the plane that were most vulnerable to enemy fire. The purpose of the study was to...
-
Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy cameras for remote- controlled military reconnaissance aircraft. The...
-
Refer to the data for Minden Company in Problem 817. The company is considering making the following changes to the assumptions underlying its master budget: In Problem 817 Minden Company is a...
-
One of Hope Ltds customers has become insolvent. As a result the amount owed to Hope Ltd has become a bad debt. Which of the following is the consequence? A. Hope Ltds current ratio has increased. B....
-
For a company with no preference shares, earnings is the: A. Sales figure. B. Profit before tax. C. Profit after tax. D. Profit after tax and after dividends.
-
Repeat Exercise 1.4 from Chapter 1. Do you think that users know what to ask for from their accountant or financial adviser? Data from Repeat Exercise 1.4 Do you think that users know what to ask for...
Study smarter with the SolutionInn App