1.Gamma Corp. has prepared a preliminary cash budget for the third quarter as shown below:



Cash Budget Jul Aug Sep

Beginning cash balance $32,000 $4,400 $6,900

Plus: Cash collections 49,400 51,000 44,600

Cash available $81,400 $55,400 $51,500

Less: Cash payments:

Purchases of inventory 36,000 9,000 11,000

Operating expenses 41,000 30,500 30,900

Capital expenditures 0 9,000 7,700

Ending cash balance $4,400 $6,900 $1,900



Subsequently, the marketing department revised its figures for cash collections. New data are as follows: $52,000 in July, $50,000 in August, and $42,000 in September. Based on the new data, calculate the new projected cash balance at the end of September.









1 points


1.Freighters Inc. has the following budgeted figures:


SALES                                           50k      65k    70k     95k

Cost of goods sold                          60% of Sales

Required ending inventory             15k + 25% of sales of next month

Inventory on hand on Jan 1st          27.5k



Calculate the ending merchandise inventory for the month of March.









1 points


1.Kapital Inc. has prepared the operating budget for the first quarter of 2015. They forecast sales of $50,000 in January, $60,000 in February, and $70,000 in March. Variable and fixed expenses are as follows:



Variable: Power cost (40% of Sales)

Miscellaneous expenses: (5% of Sales)

Fixed: Salary expense: $8,000 per month

Rent expense: $5,000 per month

Depreciation expense: $1,200 per month

Power cost/fixed portion: $800 per month

Miscellaneous expenses/fixed portion: $1,000 per month



Using the information above, calculate the amount of selling and administrative expenses for the month of February.



























1 points


1.Acme Inc. has prepared its third quarter budget and provided the following data:



Jul Aug Sep

Cash collections $50,000 $40,000 $48,000

Cash payments:

Purchases of inventory 31,000 22,000 18,000

Operating expenses 12,000 9,000 11,600

Capital expenditures 13,000 25,000 0



The cash balance on June 30 is projected to be $4,000. The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $5,000 and has to pay interest every month at an annual rate of 5%. All financing transactions are assumed to take place at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surplus cash.

How much will the company have to borrow at the end of July?










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