Autumn 2005- TBS 907- TUTORIAL 7- Cash Budgeting

Autumn 2005- TBS 907- TUTORIAL 7- Cash Budgeting - TBS 907-...

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TBS 907- AUTUMN 2005 TUTORIAL 7 – CASH BUDGETING Question 1 Spancy Audio Company has a 60-day average collection period and wishes to maintain a $5 minimum cash balance. Based on this and the information below, complete the following cash budget. What conclusions do you draw? SPANCY AUDIO COMPANY CASH BUDGET ( IN MILLIONS) July Oct Jan Apr to to to to Sep Dec Mar June Q1 Q2 Q3 Q4 Beginning Receivables $120.00 Sales $90.00 $120.00 $150.00 $120.00 Cash Collections Ending Receivables Total Cash Collections Total Cash Disbursements $80.00 $160.00 $180.00 $160.00 Net Cash Inflow Beginning Cash Balance $5.00 Net Cash Ending Cash Balance Minimum Cash Balance Cumulative Surplus( deficit) Question 2 The Crimestopper Company has projected the following quarterly sales amounts for the coming year: Q1 Q2 Q3 Q4 Sales ( in millions) $111.00 $210.00 $240.00 $120.00 Accounts receivables at the beginning of the year are $90m. Crimestopper has a 60- day collection period. Calculate cash collections in each of the four quarters by completing the following: Q1 Q2 Q3
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This note was uploaded on 07/10/2009 for the course FIN FIN taught by Professor Dr. during the Spring '09 term at Baptist College of Health Sciences.

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Autumn 2005- TBS 907- TUTORIAL 7- Cash Budgeting - TBS 907-...

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