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.Freighters Inc. has the following budgeted figures:
JAN FEB MAR APRIL
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.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.Acme Inc. has prepared its third quarter budget and provided the following data:
Jul Aug Sep
Cash collections $50,000 $40,000 $48,000
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?