Question

Do all the Q1, Q2, Q3 and Q4

The cash budget is the primary tool used in short-term financial planning. As with many calculations, the sales forecast is a primary input. As an example of the cash budgeting process, we will use the Fun Toys Corporation. The sales projections and other information provided are:
			Q1	Q2	Q3	Q4
	Sales		$    200,000,000	$      300,000,000	$    250,000,000	$    400,000,000
	Beginning receivables:		$    120,000,000
	Receivables period (days):		45
With the receivables period shown, we can calculate the percentage of sales collected in the current quarter as:
	Percentage of sales received:
With these projection, we can summarize Fun Toys' projected cash collection as:
			Q1	Q2	Q3	Q4
	Beginning receivables
	Sales
	Cash collections
	Ending receivables
Next, we need to consider cash disbursements. The cash disbursements will be in the form of payment of accounts payable, wages, taxes, and other expenses, capital expenditures, and long-term financing expenses. We have the following information concerning these disbursements:
	Purchases in previous quarter:		60%
	Payables period (days):		90
	Wages, taxes, and other:		20%
	Interest and dividends:		$      20,000,000
	Capital expenditure (Q2)		$    100,000,000
With the payables period shown, we can calculate the payments for the purchases made in the current quarter as:
	Purchases paid in the current quarter:
	Purchases paid in the next quarter:
So, the cash disbursement projections are:
			Q1	Q2	Q3	Q4
	Payment of accounts
	Wages, taxes, and other
	Capital expenditures
	Interest and dividends
	Total cash disbursements
The total cash inflows for Fun Toys is projected to be:
			Q1	Q2	Q3	Q4
	Total cash collections
	Total cash disbursements
	Net cash inflow
To calculate the cash balance each quarter for Fun Toys, we need to know the beginning cash balance and minimum cash balance, which are:
	Beginning cash balance:		$      20,000,000
	Minimum cash balance:		$      10,000,000
Finally, we can calculate the cash balance each quarter for Fun Toys, which is:
			Q1	Q2	Q3	Q4
	Beginning cash balance
	Net cash inflow
	Ending cash balance
	Minimum cash balance
	Cumulative surplus (deficit)

Answer 1

	Q1	Q2	Q3	Q4
Sales	$ 200,000,000.00	$      300,000,000.00	$ 250,000,000.00	$ 400,000,000.00
Beginning receivables:	$ 120,000,000.00
Receivables period (days):	45
With the receivables period shown, we can calculate the percentage of sales collected in the current quarter as:
A 45-day collection period means sales collections each quarter are:
Collections = 1/2 current sales + 1/2 old sales
	Current	Next Quarter
Percentage of sales received:	50%	50%
With these projection, we can summarize Fun Toys' projected cash collection as:
	Q1	Q2	Q3	Q4
Beginning receivables	$ 120,000,000.00	$      100,000,000.00	$ 150,000,000.00	$ 125,000,000.00
Sales	$ 100,000,000.00	$      150,000,000.00	$ 125,000,000.00	$ 200,000,000.00
Cash collections	$ 220,000,000.00	$      250,000,000.00	$ 275,000,000.00	$ 325,000,000.00
Ending receivables	$ 200,000,000.00
Next, we need to consider cash disbursements. The cash disbursements will be in the form of payment of accounts payable, wages, taxes, and other expenses, capital expenditures, and long-term financing expenses. We have the following information concerning these disbursements:
Purchases in previous quarter:	60%
Payables period (days):	90
Wages, taxes, and other:	20%
Interest and dividends:	$   20,000,000.00
Capital expenditure (Q2)	$ 100,000,000.00
With the payables period shown, we can calculate the payments for the purchases made in the current quarter as:
Purchases paid in the current quarter:	0%
Purchases paid in the next quarter:	100%
So, the cash disbursement projections are:
	Q1	Q2	Q3	Q4
Payment of accounts	$ 120,000,000.00	$      180,000,000.00	$ 150,000,000.00	$ 240,000,000.00
Wages, taxes, and other	$   40,000,000.00	$        60,000,000.00	$   50,000,000.00	$   80,000,000.00
Capital expenditures		$      100,000,000.00
Interest and dividends	$   20,000,000.00	$        20,000,000.00	$   20,000,000.00	$   20,000,000.00
Total cash disbursements	$ 180,000,000.00	$      360,000,000.00	$ 220,000,000.00	$ 340,000,000.00
The total cash inflows for Fun Toys is projected to be:
	Q1	Q2	Q3	Q4
Total cash collections	$ 220,000,000.00	$      250,000,000.00	$ 275,000,000.00	$ 325,000,000.00
Total cash disbursements	$ 180,000,000.00	$      360,000,000.00	$ 220,000,000.00	$ 340,000,000.00
Net cash inflow	$   40,000,000.00	$    (110,000,000.00)	$   55,000,000.00	$ (15,000,000.00)
To calculate the cash balance each quarter for Fun Toys, we need to know the beginning cash balance and minimum cash balance, which are:
Beginning cash balance:	$   20,000,000.00
Minimum cash balance:	$   10,000,000.00
Finally, we can calculate the cash balance each quarter for Fun Toys, which is:
	Q1	Q2	Q3	Q4
Beginning cash balance	$   20,000,000.00	$        60,000,000.00	$ (50,000,000.00)	$     5,000,000.00
Net cash inflow	$   40,000,000.00	$    (110,000,000.00)	$   55,000,000.00	$ (15,000,000.00)
Ending cash balance	$   60,000,000.00	$      (50,000,000.00)	$     5,000,000.00	$ (10,000,000.00)
Minimum cash balance	$ (10,000,000.00)	$      (10,000,000.00)	$ (10,000,000.00)	$ (10,000,000.00)
Cumulative surplus (deficit)	$   50,000,000.00	$      (60,000,000.00)	$   (5,000,000.00)	$ (20,000,000.00)