Minicase Chapter 20 - Minicase Chapter 20 Question(1 In order to prepare the Cash budget the cash flow for each quarter should be calculated The

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Minicase Chapter 20 Question (1) In order to prepare the Cash budget, the cash flow for each quarter should be calculated. The calculation is as follows: Q1 cash flow = (1 - .10) ($426,000) + [(90 - 53)/90]($695,000) - (.50)($695,000)(53/90) -[(90 - 53/90]($354,000) - (.25)($695,000) - $85,000 The cash flow for Ql = $29,311.07 Q2 cash flow = (57/90) ($695,000) + [(90 - 53)/90] ($708,000) – [(90 - 53)/90]($370,500) - (53/90) ($354,000) - (.25)($708,000) - $85,000 The cash flow for Q2 = $76,983.28 Q3 cash flow = (57/90) ($708y000) + [(90 - 57)/90]($741,000) – [(90 - 53)/90]($378,500) - (53/90) ($370,500) - (.25) ($741,000) - $85,000 The cash flow for Q3 = $76,061.07 Q4 cash flow = (57/90)($741,000) + ((90 - 57)/90]($757,000) - [(90 - 53)/90] ($392,000) - (53/90)($378,500) - (.25)($757,000) - $85,000 - 240,000 The cash flow for Q4 = -$ 151,432.95 Quarterly cash balance is as follows: Piepkorn Manufacturing Cash Budget Q1 Q2 Q3 Q4 Beginning cash balance $164,000.00 $193,311.07 $270,294.35 $346,355.42 Net cash inflow $ 29,311.07 $ 76,983.28 $ 76,061.07 -$151,432.95 Ending cash balance $193,311.07 $270,294.35 $346,355.42 $194,922.47 Minimum cash balance $100,000.00 $100,000.00 $100,000.00 $100,000.00 Cumulative Surplus (deficit) $ 93,311.07 $170,294.35 $246,355.42 $ 94,922.47
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Short-Term Financial Plan Q1 Q2 Q3 Q4 Beginning Cash Balance $100,000.00 $100,000.00 $100,000.00 $100,000.00 Net cash inflow 29,311.07 76,983.28 76,061.07 -151,432.95 New short-term investments -29,951.11 -77,922.79 -77,779.81 0 Income on short-term investments 640.00 939.51 1,718.74 2,496.54 Short-term investments sold 0 0 0 148,936.80 New short-term borrowing 0 0 0 0 Interest on short-term borrowing 0 0 0 0 Short-term borrowing repaid 0 0 0 0 Ending cash balance Minimum $100,000.00 $100,000.00 $100,000.00 $100,000.00 Minimum cash balance -$100,000.00 -$100,000.00 -$100,000.00 -$100,000.00 Cumulative surplus (deficit) 0 0 0 0 Beginning short-term investments $64,000.00 $93,951.07 $171,873.86 $249,653.67 Ending short-term investments $93,951.07 $171,873.86 $249,653.67 $100,716.93 Beginning short-term debt 0 0 0 0 Ending short-term debt 0 0 0 0 The interest calculations for each quarter are as follows: Surplus at the beginning of the quarter Cumulative amount Earnings/ Cash Cost Q1 $64,000.00 x .01 = $640.00 $640.00 Q2 $93,311.07 + $640.00 = $93,951.07 x .01 = $939.51 $939.51 Q3 $170,294.34+$640+$939.51 = $171,873.86 x .01 = $1718.74 $1718.74
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This note was uploaded on 08/02/2009 for the course SCS scs 0976 taught by Professor Asare during the Summer '09 term at University of Toronto- Toronto.

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Minicase Chapter 20 - Minicase Chapter 20 Question(1 In order to prepare the Cash budget the cash flow for each quarter should be calculated The

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