70.2K

Verified Solution

Link Copied!

Foundations of Financial Management Block, Hirt, and Danielsen Problem 4-24 Objective: Cash budget Student Name: Course Name: Student ID: Course Number: Graham Potato Company has projected sales of $6,000 in September, $10,000 in October, $16,000 in November, and $12,000 in December. Of the company's sales, 20 percent are paid for by cash and 80 percent are sold on credit. Experience shows that 40 percent of the accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after. Determine collections for November and December. Also assume the company's cash payments for November and December are $13,000 and $6,000, respectively. The beginning cash balance in November is $5,000, which is the desired minimum balance. Prepare a cash budget with borrowing needed or repayments for November and December. (You will need to prepare a cash receipts schedule first). Solution Problem 4-24 Instructions Enter cell references, data, and formulas to comp Graham Potato Company Cash Receipts Schedule September October November December FORMULA FORMULA FORMULA Sales Cash sales (20%) Collections (80% of previous month's sales) Total cash receipts FORMULA FORMULA FORMULA FORMULA FORMULA FORMULA Graham Potato Company Cash Budget November FORMULA December FORMULA FORMULA Cash receipts Cash payments Net cash flow Beginning cash balance Cumulative cash balance Monthly loan or (repayment) Cumulative loan balance Ending cash balance FORMULA FORMULA FORMULA FORMULA FORMULA FORMULA FORMULA FORMULA FORMULA FORMULA

Answer & Explanation Solved by verified expert

See Answer