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Cash budgetlong dash—Basic   Grenoble Enterprises had sales of $50,100 in March and $59,600 in April. Forecast...

Cash

budgetlong dash—Basic

  Grenoble Enterprises had sales of $50,100 in March and $59,600 in April. Forecast sales for​ May, June, and July are

$69,700​, $80,100​,and $99,500​, respectively. The firm has a cash balance of $5,200

on May 1 and wishes to maintain a minimum cash balance of $5,200.

Given the following​ data, prepare and interpret a cash budget for the months of​ May, June, and July.

​(1) The firm makes

20 % of sales for​ cash, 60% are collected in the next​ month, and the remaining 20%

are collected in the second month following sale.  

​(2) The firm receives other income of $2,100 per month.  

​(3) The​ firm's actual or expected​ purchases, all made for​ cash, are $50,200​, $70,300​,

and $80,500 for the months of May through​ July, respectively.  

​(4) Rent is $3,200 per month.  

​(5) Wages and salaries are

11 % of the previous​ month's sales.  

​(6) Cash dividends of $2,600 will be paid in June.  

​(7) Payment of principal and interest of$3,80 is due in June.  

​(8) A cash purchase of equipment costing $5,900 is scheduled in July.  

​(9) Taxes of $6,500 are due in June.

Complete the first month of the cash budget for Grenoble Enterprises below:(Round to the nearest dollar. Please input all the values in the table before checking your answers.)

March April May june July

Sales

Cash Sales

Lag 1 month

Lag 2 month

Other income

Total Cash receipts

Disbursements

Purchases

rent

wages and salaries

dividends

principal and interest

purchase of new equipment

taxes due

total cash disbursements

Net cash flow

Add: beginning cash

ending cash

minimum cash

required total financing ( notes payable )

Excess cash balance (marketable securities)

Solutions

Expert Solution

Particulars March April May June July
Sales $50,100 $59,600 $69,700 $80,100 $99,500
Cash Sales $10,020 $11,920 $13,940 $16,020 $19,900
Lag 1 month $35,760 $41,820 $48,060
Lag 2 month $11,920 $13,940 $16,020
Other income $2,100 $2,100 $2,100
Total Cash receipts $63,720 $73,880 $86,080
Disbursements:
Purchases $50,200 $70,300 $80,500
Rent $3,200 $3,200 $3,200
Wages & Salaries $6,556 $7,667 $8,811
Dividends $0 $2,600 $0
Principal and Interest $0 $3,800 $0
Purchase of New Equipment $0 $0 $5,900
Taxes Due $0 $6,500 $0
Total Cash Disbursements $59,956 $94,067 $98,411
Net Cash Flow $3,764 -$20,187 -$12,331
Add: beginning cash $5,200 $5,200 $5,200
ending cash $8,964 -$14,987 -$7,131
minimum cash $5,200 $5,200 $5,200
Required total financing (notes payable) $0 $9,787 $1,931
Excess cash balance (marketable securities) $3,764 $0 $0

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