Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Accounting Expert

Cash Budget

Thunder, Inc. is developing its cash budget for the upcoming year. Of Thunder’ sales, 20% is for cash, another 60% is gathered in the month following sale, and 20% is gathered in the second month following sale. November and December sales for 2010 were $229000 and $250,000, correspondingly.

Thunder’ purchases its raw materials 2 months in advance of its sales equivalent to 70% of its final sales price. The supplier is paid one month after it makes delivery. For instance, purchases for April sales are made in month of February, and payment is made in the month of March.

In addition, Thunder pays $10,000 per month for rent and $20,000 each and every month for other expenditures. Tax prepayments for $32,000 are made each quarter start in March.

The company’s cash balance at December 31, 2010, was $26,000 and minimum balance of $25,000 should be maintained at all times. Suppose that any short-term financing required maintaining cash balance would be paid off in the month following the month of financing if sufficient funds are accessible.

Interest on short-term loans (12%) is paid monthly. Borrowing to meet estimated monthly cash requires takes place at the beginning of month. For instance, if in the month of April the firm anticipates to have require for an additional $60,500, these funds would be borrowed at the beginning of April with interest of $605 (.12 x 1/12 x $60,500) owed for April and paid at the starting of May.

Sales for Thunder Inc.:

January

$229,000

February

$250,000

March

$270,000

April

$275,000

May

$280,000

June

$290,000

July

$280,000

August

$260,000


Required:

problem1. Prepare a monthly cash budget for Thunder Inc. covering the first 7 months of 2010.

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M93843

Have any Question? 


Related Questions in Financial Accounting

There are many challenges and opportunities facing managers

There are many challenges and opportunities facing managers in the long-term care system of the future. Describe what skills managers will need to meet those challenges and opportunities, and specifically what skills you ...

Appendix a in the textbook details criteria for designing

Appendix A in the textbook details criteria for Designing or Evaluating a Long-Term Care System. Research a long-term care facility in your area and prepare a PowerPoint slide presentation detailing how this specific fac ...

Defend the answerlisa conducts a qualitative study of

DEFEND THE ANSWER Lisa conducts a qualitative study of people's online shopping behavior. She compares her results to that of similar studies and finds a similarity in coding across multiple studies. On the basis of the ...

Module cost of capital worksheetpromptreview the questions

Module Cost of Capital Worksheet Prompt Review the questions below and use the data provided in the question to solve the calculation. As you work through each equation, think about where the data for your company maybe ...

Assignmenti structuring a keep-or-drop product line

Assignment: I. Structuring a Keep-or-Drop Product Line Problem Shown below is a segmented income statement for Orzo Company's three laminated flooring product lines:   Strip Plank Parquet Total Sales revenue $400,000 $20 ...

James investor corporation acquires 25 of the common shares

James (investor) Corporation acquires 25% of the common shares of Heck (investee) Company for $350,000 on January 1, 2014. For 2014, Heck reports net income of $50,000 and paid dividends of $16,000. Instructions (a) Prep ...

Assignment- cost concepts and types of costing1 given the

Assignment- Cost Concepts and Types of Costing 1. Given the cost formula, Y = $7,000 + $1.80X, what would be the total cost for an activity level of 4,000 units? A. $7,200 B. $7,000 C. $200 D. $14,200 2. In describing th ...

1 write the journal entries for the following transactionsa

1) Write the journal entries for the following transactions: a) The company acquires $200 of inventory on accounts (does not pay cash) b) The company sells $125 of the $200 inventory purchased in transaction (a) above. T ...

Assignmentwrite a five- to seven-page financial statement

Assignment Write a five- to seven-page financial statement analysis of a public company, formatted according to APA style. Here is a breakdown of the sections within the body of the assignment: Company Overview Provide a ...

You need to prepare a report on the topic communication amp

You need to prepare a report on the topic communication & leadership for the introduction to financial accounting. Learning Outcomes a) Use the accounting elements (assets, liabilities, equity, revenues and expenses) and ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro