Robots R Us is a midsize company at the cutting edge of technology. You were hired...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Robots R Us is a midsize company at the cutting edge of technology. You were hired in May to manage their accounts department. The CEO has requested a Cash Budget for the month of June and accounts provided you with the following information: . May 31, cash balance $40,000 • Last month credit sales $180,000 • Projected Amortization expense $12,000 Projected Sales in June (80% on credit) $250,000 • Historically the company collects 80% of the credit sales in the same month. • The remainder of the receivable is collected in the following month with a 2% provision for uncollectible Administrative expenses of $45,000 to be settled in June • A small manufacturing equipment will be bought for $100,000 with a 10% down payment in June. Machine delivery is expected in August. • Raw material purchases are expected to be $156,000 of which 75% will be paid during the month and the remainder in the following month. • May 31 Accounts payable balance was $25.000. The company desire to maintain a $50,000 minimum cash balance on hand. Required: 1. Prepare the cash budget for the company for the month of June. 2. What is the maximum amount of cash dividend the company can pay assuming no bank covenants restricting such declaration. Robots R Us is a midsize company at the cutting edge of technology. You were hired in May to manage their accounts department. The CEO has requested a Cash Budget for the month of June and accounts provided you with the following information: . May 31, cash balance $40,000 • Last month credit sales $180,000 • Projected Amortization expense $12,000 Projected Sales in June (80% on credit) $250,000 • Historically the company collects 80% of the credit sales in the same month. • The remainder of the receivable is collected in the following month with a 2% provision for uncollectible Administrative expenses of $45,000 to be settled in June • A small manufacturing equipment will be bought for $100,000 with a 10% down payment in June. Machine delivery is expected in August. • Raw material purchases are expected to be $156,000 of which 75% will be paid during the month and the remainder in the following month. • May 31 Accounts payable balance was $25.000. The company desire to maintain a $50,000 minimum cash balance on hand. Required: 1. Prepare the cash budget for the company for the month of June. 2. What is the maximum amount of cash dividend the company can pay assuming no bank covenants restricting such declaration.
Expert Answer:
Answer rating: 100% (QA)
To prepare the cash budget for the company for the month of June we need to consider all cash inflows and outflows during the month Lets break down th... View the full answer
Related Book For
Accounting Principles
ISBN: 978-1119419617
IFRS global edition
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt
Posted Date:
Students also viewed these finance questions
-
IST 8100 Supplemental Cases Inside Microsoft During last fall's United Way campaign at Microsoft, two vice-presidents made a wager on whose division would generate the most contributions. The loser,...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
Explain why placing soy sauce in airtight bottles was more successful for long-distance shipping than simply placing the sauce in barrels.
-
Understanding and using bond tables. Exhibit 10.19 presents a bond table for 8%, semiannual bonds for various market yields and years to maturity. The amounts given are percentages of face value. a....
-
Answer the same question(s) for the slight degradation in overall customer value for those customers who remain active through consecutive time periods: Are you willing to live with it, or do you...
-
Identify the most appropriate approach and then design. Provide a rationale as to why this approach and design would be most appropriate. Develop a hypothetical research scenario that would...
-
A beginning accounting student tried to complete a work sheet for Joyce Lee's Tax Service. The following adjusting entries were to have been analyzed and entered onto the work sheet. The work sheet...
-
Question 5 Consider a situation where there are two polluters. The government decides to set up a cap and trade system to regulate pollution. The government would like to allow 100 units of pollution...
-
Randy Corp. issued $200,000 of 7.6% (payable each 28 February and 31 August), 4-year bonds. The bonds were dated 1 March 20X4, and mature on 28 February 20X8. The bonds were issued (to yield 8%) on...
-
Solve the following system of equations. 1 1 -4 1 2 ix+= 3 x = y X
-
Patrick is entitled to receive monthly payments of $1,500 over his life from his employer's qualified pension plan or he can take $1,300 monthly over his life and the life of his wife. The payments...
-
Suppose you take out a 20-year mortgage for a house that costs $472858. Assume the following: The annual interest rate on the mortgage is 4%. The bank requires a minimum down payment of 20% at the...
-
Benjamin Company produces products C, J, and R from a joint production process. Each product may be sold at the split-off point or processed further. Joint production costs of $95,000 per year are...
-
On January 1, 2019 company A issues a $1,500,000 of 10% bonds due in 10 years with interest payable at year end annually. The current market rate of interest bonds of similar risk is 8% A) What...
-
2. Write a Java program that consists of a definition for a public class called Neighbours. This should have one constructor, which takes a string[] as its parameter. The constructor should use a...
-
Answer the following questions in this word document and submit via the ITC no later than 06/04/2022. Given the following model: Y=C+I+G C = a + b(Y-T) T = T+tY I = +iY 1- State the parameters in...
-
The sales department of P. Gillen Manufacturing Company has forecast sales in March to be 20,000 units. Additional information follows: Finished goods inventory, March 1 . . . . . . . . . . . . . . ....
-
Yinhu Company pays HK$318,000,000 to purchase all the outstanding ordinary shares of Lia Corporation. At the date of purchase, the net assets of Lia have a book value of HK$290,000,000. Yinhus...
-
New Wales Power has decided to invest in renewable energy sources to meet part of its energy needs for production. It is considering solar power versus wind power. After considering cost savings as...
-
What are the essential features of the allowance method of accounting for bad debts?
-
Consider the two-tank liquid-level system shown in Figure 7.17. The liquid is pumped into tanks 1 and 2 through valves of linear resistances \(R_{1}\) and \(R_{2}\), respectively. The pressure of the...
-
The room shown in Figure 7.34 has a heater with heat flow rate input of \(q_{0}\). The thermal capacitances of the heater and the room air are \(C_{1}\) and \(C_{2}\), respectively. The thermal...
-
Consider the single-tank liquid-level system shown in Figure 7.16, where the volume flow rate into the tank through a pipe is \(q_{\mathrm{i}}\). A pump is connected to the bottom of the tank through...
Study smarter with the SolutionInn App