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17 6 Capital Budget: 7 Equipment costing $300,000 will be purchased at the end of Q2, paid in cash. The equipment will not be placed into service for purposes of depreciation until after the end of the year due to installation and 8 Other cash items: 9 Tax Rate: 30% 10 The beginning cash balance is $5,000 and the company intends to maintain this level of cash ($5,000-S6,000) at the end of each quarter. If the cash balance exceeds $6,000, the surplus in moved to 11 If ending cash is insufficient, loans are taken out at the beginning of the quarter in increments of $1,000 bearing a simple interest rate of 1% per month. The interest is paid in the quarter following any 12 All components of cash COGS (DM, DL, VMOH) and cash SG&A are paid 2/3 in the quarter incurred purchased and 1/3 in the following quarter. Depreciation must be subtracted from the COGS to 13 Fixed Overhead and Fixed SG&A are paid 100% in the quarter incurred. 14 All Fixed Assets are depreciated over 10 years (40 quarters). However, the new equipment purchased in Q2 2021 was not placed in service by 12/31/2021. Therefore, no depreciation was recorded on the 15 Sales are collected 50% in the quarter of sale and the balance in the following quarter. 16 Taxes are paid in the quarter following the quarter incurred. 17 18 Use the template below to prepare the Cash Budget. 19 19 20 Cash Budget 2021 Q1 02 Q3 04 21 Beg Cash 22 Collections 23 Disbursements: 24 DM - DW 25 23 DL 26 26 VOH 27 21 FOH 28 VSGA 29 FSGA 30 Capital Purchases 31 Interest Expense 32 Tax Expense 33 Change to Cash Balance 34 Trfd (TO)/From Savings 35 Loans borrowed (repaid) 36 37 Ending Cash $5,483 $5,752 $5,772 $5,170 17 6 Capital Budget: 7 Equipment costing $300,000 will be purchased at the end of Q2, paid in cash. The equipment will not be placed into service for purposes of depreciation until after the end of the year due to installation and 8 Other cash items: 9 Tax Rate: 30% 10 The beginning cash balance is $5,000 and the company intends to maintain this level of cash ($5,000-S6,000) at the end of each quarter. If the cash balance exceeds $6,000, the surplus in moved to 11 If ending cash is insufficient, loans are taken out at the beginning of the quarter in increments of $1,000 bearing a simple interest rate of 1% per month. The interest is paid in the quarter following any 12 All components of cash COGS (DM, DL, VMOH) and cash SG&A are paid 2/3 in the quarter incurred purchased and 1/3 in the following quarter. Depreciation must be subtracted from the COGS to 13 Fixed Overhead and Fixed SG&A are paid 100% in the quarter incurred. 14 All Fixed Assets are depreciated over 10 years (40 quarters). However, the new equipment purchased in Q2 2021 was not placed in service by 12/31/2021. Therefore, no depreciation was recorded on the 15 Sales are collected 50% in the quarter of sale and the balance in the following quarter. 16 Taxes are paid in the quarter following the quarter incurred. 17 18 Use the template below to prepare the Cash Budget. 19 19 20 Cash Budget 2021 Q1 02 Q3 04 21 Beg Cash 22 Collections 23 Disbursements: 24 DM - DW 25 23 DL 26 26 VOH 27 21 FOH 28 VSGA 29 FSGA 30 Capital Purchases 31 Interest Expense 32 Tax Expense 33 Change to Cash Balance 34 Trfd (TO)/From Savings 35 Loans borrowed (repaid) 36 37 Ending Cash $5,483 $5,752 $5,772 $5,170

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