The Big Sister Comparny is in a seasonal business and prepares quarterly budgets. Its fiscal year...
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The Big Sister Comparny is in a seasonal business and prepares quarterly budgets. Its fiscal year runs from January 1 through December 31. Production ocuirs only in the first quarter (January to March), but sales take place throughout the year. The sales forecast for the coming year shows the following: First quarter $480,000 Third quarter $480,000 Second quarter 312,000 Fourth quarter 480,000 There are no cash sales, and the beginning balance of receivables is expected to be collected in the first quarter. Subsequent collections are two-thirds in the quarter when sales take place and one-third in thefollowing quarter. The company makes materials purchases valued at $397.000 in the first quarter, but makes no purchases in the last three quarters. It makes payment when it purchases the materials. Direct labour of $348,000 is incurred and paid only in the first quarter. Factory overhead of $338.000 is alse incurred and paid in the first quarter, and is ata standby level of $100,000 during the other three quarters. Seling and administrative experises of $34.000 are paid each qua throughout the year. Big Sister has an operating line of credit with its bank at an interest rate of 5%per annum. The company plans to keepa cash balance of at least $10,000 at all times, and it will borrow and repay in multiples of $5.000.It makes all borrowings at the beginning of aquarter, and makes all payments at the end of a quarter. It pays interest only on the portion of the loan that it repays in a quarter. oertively The cash The company plans to purchase equipment in the second and fourth quarters for $69.000 and $148,000, respectively. The cash balance on January 1 is $25,000 and accounts receivable total $152,000. Prepare a cash budget for the year. Show receipts, disbursements, the ending cash balance before borrowing, the amounts borrowed and repaid, interest payments, and the ending cash balance. (Round answers to the neorest whole dollar, eg. 5,275) THE BIG SISTER COMPANY Cash Budget For the Four Quarters Ending December 31 1. THE BIG SISTER COMPANY Cash Budget For the Four Quarters Ending December 31 ENG The Big Sister Comparny is in a seasonal business and prepares quarterly budgets. Its fiscal year runs from January 1 through December 31. Production ocuirs only in the first quarter (January to March), but sales take place throughout the year. The sales forecast for the coming year shows the following: First quarter $480,000 Third quarter $480,000 Second quarter 312,000 Fourth quarter 480,000 There are no cash sales, and the beginning balance of receivables is expected to be collected in the first quarter. Subsequent collections are two-thirds in the quarter when sales take place and one-third in thefollowing quarter. The company makes materials purchases valued at $397.000 in the first quarter, but makes no purchases in the last three quarters. It makes payment when it purchases the materials. Direct labour of $348,000 is incurred and paid only in the first quarter. Factory overhead of $338.000 is alse incurred and paid in the first quarter, and is ata standby level of $100,000 during the other three quarters. Seling and administrative experises of $34.000 are paid each qua throughout the year. Big Sister has an operating line of credit with its bank at an interest rate of 5%per annum. The company plans to keepa cash balance of at least $10,000 at all times, and it will borrow and repay in multiples of $5.000.It makes all borrowings at the beginning of aquarter, and makes all payments at the end of a quarter. It pays interest only on the portion of the loan that it repays in a quarter. oertively The cash The company plans to purchase equipment in the second and fourth quarters for $69.000 and $148,000, respectively. The cash balance on January 1 is $25,000 and accounts receivable total $152,000. Prepare a cash budget for the year. Show receipts, disbursements, the ending cash balance before borrowing, the amounts borrowed and repaid, interest payments, and the ending cash balance. (Round answers to the neorest whole dollar, eg. 5,275) THE BIG SISTER COMPANY Cash Budget For the Four Quarters Ending December 31 1. THE BIG SISTER COMPANY Cash Budget For the Four Quarters Ending December 31 ENG
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Particulars Quarter1 Quarter2 Quarter3 Quarter4 Opening Balance 25000 10000 12250 13500 Add Accounts ... View the full answer
Related Book For
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118644942
6th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
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