{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Minicase Chapter 20

# Minicase Chapter 20 - Minicase Chapter 20 Question(1 In...

This preview shows pages 1–3. Sign up to view the full content.

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

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Piepkorn Manufacturing 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 Q4 \$246,355.42 + \$640 +\$939.51+ \$1718.74 = \$249,653.67 x .01 =\$2496.54 \$2496.54
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}