Continued.... A long-term bond purchased by Pelican Merchandising 2 years ago, with a face value of $450,000 will mature on January 15, 2022. To meet the financial obligations of the business, management has decided to liquidate the investment upon maturity. On that date semi-annual interest computed at a rate of 8½% per annum is also expected to be collected. (ix) A compensation payment of $355,000 to a former employee for a back injury sustained in an accident in the business storage facility, not covered by insurance, becomes due and payable on January 25, 2022. (x) (xi) Wages and salaries are expected to be $3,264,000 per annum and will be paid monthly. (xii) The cash balance on March 31, 2022 is expected to be an overdraft of $253,000 Required: A cash budget, with a total column, for the quarter ending March 31, 2022, showing the expected cash receipts and payments for each month and the ending cash balance for each of the three months, given that no financing activities took place.
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- CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2019 and 2020: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2019. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal, and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.Pelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows:Month2021 - 2022CashSalesSalesOnAccountCashPurchasesPurchasesOnAccountNovember 2021 $138,100 $480,000 $345,000December 2021 $156,500 $600,000 $25,800 $380,000January 2022 $170,975 $650,000 $44,625 $400,000February 2022 $135,740 $700,000 $30,400 $480,000March 2022 $226,420 $800,000 $55,100 $540,000Pelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows:Month2021 - 2022CashSalesSalesOnAccountCashPurchasesPurchasesOnAccountNovember 2021 $138,100 $480,000 $345,000December 2021 $156,500 $600,000 $25,800 $380,000January 2022 $170,975 $650,000 $44,625 $400,000February 2022 $135,740 $700,000 $30,400 $480,000March 2022 $226,420 $800,000 $55,100 $540,000 Upon receipt of the budget, the team manager, June Jackson, has now informed you that, in keeping with industry players, the management of Pelican Merchandising have indicated an industry requirement to maintain a minimum cash balance of $185,000 each month. She has also noted that…
- Pelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows:Month2021 - 2022CashSalesSalesOnAccountCashPurchasesPurchasesOnAccountNovember 2021 $138,100 $480,000 $345,000December 2021 $156,500 $600,000 $25,800 $380,000January 2022 $170,975 $650,000 $44,625 $400,000February 2022 $135,740 $700,000 $30,400 $480,000March 2022 $226,420 $800,000 $55,100 $540,000(ii) An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following the…Pelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows:Month2021 - 2022CashSalesSalesOnAccountCashPurchasesPurchasesOnAccountNovember 2021 $138,100 $480,000 $345,000December 2021 $156,500 $600,000 $25,800 $380,000January 2022 $170,975 $650,000 $44,625 $400,000February 2022 $135,740 $700,000 $30,400 $480,000March 2022 $226,420 $800,000 $55,100 $540,000(ii) An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following the…Pelican Merchandising & More is a family-owned store. The business is now approaching the end of the year and is in the process of identifying its cash needs for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022. (i) Extracts from the sales and purchases budgets are as follows:Month2021 - 2022CashSalesSalesOnAccountCashPurchasesPurchasesOnAccountNovember 2021 $138,100 $480,000 $345,000December 2021 $156,500 $600,000 $25,800 $380,000January 2022 $170,975 $650,000 $44,625 $400,000February 2022 $135,740 $700,000 $30,400 $480,000March 2022 $226,420 $800,000 $55,100 $540,000 (ii) An analysis of the records shows that trade receivables (accounts receivable) are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following…
- Pelican Merchandising & More is a family-owned store. The business is now approaching the end of the year and is in the process of identifying its cash needs for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2022. (i) Extracts from the sales and purchases budgets are as follows:Month2021 - 2022CashSalesSalesOn AccountCashPurchasesPurchasesOnAccountNovember 2021 $138,100 $480,000 $345,000December 2021 $156,500 $600,000 $25,800 $380,000January 2022 $170,975 $650,000 $44,625 $400,000February 2022 $135,740 $700,000 $30,400 $480,000March 2022 $226,420 $800,000 $55,100 $540,00 Another team member who is preparing the Budgeted Balance Sheet for the business for the same quarter ending March 31, 2022 and has asked you to furnish him with the figures for the expected trade receivables and payables to be included in the statement. Is that a reasonable…Pelican Merchandising & More is a family-owned store. The business is now approaching the end of the year and is in the process of identifying its cash needs for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2022. (i) Extracts from the sales and purchases budgets are as follows:Month2021 - 2022CashSalesSalesOn AccountCashPurchasesPurchasesOnAccountNovember 2021 $138,100 $480,000 $345,000December 2021 $156,500 $600,000 $25,800 $380,000January 2022 $170,975 $650,000 $44,625 $400,000February 2022 $135,740 $700,000 $30,400 $480,000March 2022 $226,420 $800,000 $55,100 $540,000(ii) An analysis of the records shows that trade receivables (accounts receivable) are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale 35% in the first month following the sale8% in the second month following…Pelican Merchandising & More is a family-owned store. The business is now approaching the end of the year and is in the process of identifying its cash needs for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2022. (i) Extracts from the sales and purchases budgets are as follows:Month2021 - 2022CashSalesSalesOn AccountCashPurchasesPurchasesOnAccountNovember 2021 $138,100 $480,000 $345,000December 2021 $156,500 $600,000 $25,800 $380,000January 2022 $170,975 $650,000 $44,625 $400,000February 2022 $135,740 $700,000 $30,400 $480,000March 2022 $226,420 $800,000 $55,100 $540,00 A schedule of expected cash disbursements for accounts payable (purchases on account) for each of the months January to March.
- Help please Pelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows Month 2021-2022 Cash sales Sales on account Cash purchases Purchases on account November 2021 138,100 480,000 345,000 December 2021 156,500 600,000 25,800 380,000 January 2022 170,975 650,000 44,625 400,000 February 2022 135,740 700,000 30,400 480,000 March 2022 226,420 800,000 55,100 540,000 (ii) An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the…Pelican Merchandising & More is a family-owned store. The business is now approaching the end of the year and is in the process of identifying its cash needs for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows: Month2021 - 2022 CashSales SalesOnAccount CashPurchases PurchasesOnAccount November 2021 $138,100 $480,000 $345,000 December 2021 $156,500 $600,000 $25,800 $380,000 January 2022 $170,975 $650,000 $44,625 $400,000 February 2022 $135,740 $700,000 $30,400 $480,000 March 2022 $226,420 $800,000 $55,100 $540,000 (ii) An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the…Pelican Merchandising & More is a family-owned store. The business is now approaching the end of the year and is in the process of identifying its cash needs for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows: Month2021 - 2022 CashSales SalesOnAccount CashPurchases PurchasesOnAccount November 2021 $138,100 $480,000 $345,000 December 2021 $156,500 $600,000 $25,800 $380,000 January 2022 $170,975 $650,000 $44,625 $400,000 February 2022 $135,740 $700,000 $30,400 $480,000 March 2022 $226,420 $800,000 $55,100 $540,000 (ii) An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the…