Question
In: Finance
The Sun Pacific Company budgeted the following sales: July 200,000 August
The Sun Pacific Company budgeted the following sales:
July 200,000
August 210,000
September 190,000
Sales in May were 190,000 and in June 180,000. 60% of sales are cash, 30% of sales are to be collected the next month, and the remaining 10% in 2 months.
Budgeted purchases of the required materials for production are:
July 100,000
August 105,000
September 95,000
Purchases in June were 90,000. 70% of purchases are cash and 30% should be paid the next month.
Direct Labor is 35% of purchases
Selling Expenses are 8% of sales
Other Fixed Expenses are $7,000 monthly
Taxes of $25,000 will be paid in September
Dividends of $20,000 will be paid in August
Sun Pacific has a loan with $100,000 outstanding balance in June
Interest expenses are 1% of the last month outstanding balance
The firm cash policy is to maintain a $25,000 ending cash balance (the ending balance in June was $25,000). Excess should be used to repay loans.
REQUIRED CALCULATE
1.Accounts payable for the next period (October)
2.If the company purchase a machine with a cost of $30,000 in September, doeswill the company need a loan?
3.If the answer to 2 is yes, what will be the amount?
Solutions
Expert Solution
| Answer 1 | ||||||||
| Accounts payable for the next period (October) = Budgeted purchases for September * 30% = $95000 * 30% = $28,500 | ||||||||
| Answer 2 & 3 | ||||||||
| Cash Budget for July , August and September | ||||||||
| July | August | September | ||||||
| Receipts | ||||||||
| Sales Collection | ||||||||
| Cash | $120,000.00 | $126,000.00 | $114,000.00 | |||||
| May sales collection | $19,000.00 | |||||||
| June Sales Collection | $54,000.00 | $18,000.00 | ||||||
| July sales collection | $60,000.00 | $20,000.00 | ||||||
| August sales Collection | $63,000.00 | |||||||
| Total Receipts | $193,000.00 | $204,000.00 | $197,000.00 | |||||
| Payments | ||||||||
| Cash Purchase | $70,000.00 | $73,500.00 | $66,500.00 | |||||
| Credit purchase | $27,000.00 | $30,000.00 | $31,500.00 | |||||
| Direct Labour | $35,000.00 | $36,750.00 | $33,250.00 | |||||
| Selling Expenses | $16,000.00 | $16,800.00 | $15,200.00 | |||||
| Other fixed expenses | $7,000.00 | $7,000.00 | $7,000.00 | |||||
| Taxes | $25,000.00 | |||||||
| Dividend | $20,000.00 | |||||||
| Interest on loan | $1,000.00 | $630.00 | $436.80 | |||||
| Purchase of machine | $30,000.00 | |||||||
| Total Payments | $156,000.00 | $184,680.00 | $208,886.80 | |||||
| Cash Surplus | $37,000.00 | $19,320.00 | -$11,886.80 | |||||
| Add : Beginning Cash balance | $25,000.00 | $25,000.00 | $25,000.00 | |||||
| Total Cash Available | $62,000.00 | $44,320.00 | $13,113.20 | |||||
| Less : Loan repayment | $37,000.00 | $19,320.00 | $0.00 | |||||
| Add : Loan taken | $0.00 | $0.00 | $11,886.80 | |||||
| Ending Cash balance | $25,000.00 | $25,000.00 | $25,000.00 | |||||
| Yes , the company need a loan to purchase a machine in september. | ||||||||
| Amount of Loan = $11,886.80 | ||||||||
jeff jeffy answered 2 years agoRelated Solutions
The Sun Pacific Company budgeted the following sales: July 200,000 August
The Sun Pacific Company budgeted the following sales:
July
200,000
August
210,000
September 190,000
Sales in May were 190,000 and in June 180,000. 60% of sales are
cash, 30% of sales are to be collected the next month, and the
remaining 10% in 2 months.
Budgeted purchases of the required materials for production
are:
July
100,000
August
105,000
September 95,000
Purchases in June were 90,000. 70% of purchases are cash and 30%
should be paid the next month.
Direct Labor...
The Sun Pacific Company budgeted the following sales: July 200,000 August
The Sun Pacific Company budgeted the following sales:
July
200,000
August
210,000
September 190,000
Sales in May were 190,000 and in June 180,000. 60% of sales are
cash, 30% of sales are to be collected the next month, and the
remaining 10% in 2 months.
Budgeted purchases of the required materials for production
are:
July
100,000
August
105,000
September 95,000
Purchases in June were 90,000. 70% of purchases are cash and 30%
should be paid the next month.
Direct Labor...
The Sun Pacific Company budgeted the following sales: July 200,000 August 210,000 September
The Sun Pacific Company budgeted the following sales:
July
200,000
August
210,000
September 190,000
Sales in May were 190,000 and in June 180,000. 60% of sales are
cash, 30% of sales are to be collected the next month, and the
remaining 10% in 2 months.
Budgeted purchases of the required materials for production
are:
July
100,000
August
105,000
September 95,000
Purchases in June were 90,000. 70% of purchases are cash and 30%
should be paid the next month.
Direct Labor...
The Sun Pacific Company budgeted the following sales: July 210,000 August 220,000 September
The Sun Pacific Company budgeted the following sales:
July
210,000
August
220,000
September 190,000
Sales in May were 190,000 and in June 180,000. 60% of sales are
cash, 30% of sales are to be collected the next month, and the
remaining 10% in 2 months.
Budgeted purchases of the required materials for production
are:
July
110,000
August
115,000
September 95,000
Purchases in June were 90,000. 70% of purchases are cash and 30%
should be paid the next month.
Direct Labor...
The Sun Pacific Company budgeted the following sales: July 210,000 August 220,000 September
The Sun Pacific Company budgeted the following sales:
July
210,000
August
220,000
September 190,000
Sales in May were 190,000 and in June 180,000. 60% of sales are
cash, 30% of sales are to be collected the next month, and the
remaining 10% in 2 months.
Budgeted purchases of the required materials for production
are:
July
110,000
August
115,000
September 95,000
Purchases in June were 90,000. 70% of purchases are cash and 30%
should be paid the next month.
Direct Labor...
The Sun Pacific Company budgeted the following sales: July 210,000 August 220,000 September 190,000 Sales in...
The Sun Pacific Company budgeted the following sales: July
210,000 August 220,000 September 190,000 Sales in May were 190,000
and in June 180,000. 60% of sales are cash, 30% of sales are to be
collected the next month, and the remaining 10% in 2 months.
Budgeted purchases of the required materials for production are:
July 110,000 August 115,000 September 95,000 Purchases in June were
90,000. 70% of purchases are cash and 30% should be paid the next
month. Direct Labor...
Harrti Corporation has budgeted for the following sales: July $ 449,000 August $ 584,000 September $...
Harrti Corporation has budgeted for the following sales:
July $ 449,000
August $ 584,000
September $ 617,000
October $ 892,000
November $ 750,000
December $ 710,000
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The
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August
5,000 units
September
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August
Credit Sales
$135,000
$145,000
$90,000
Cash Sales
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$195,000
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$400,000
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Past experience indicates that 60% of the credit sales will be
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