In: Finance
Cash Budget - The following information applies to Company A:
Jan. | Feb. | Mar. | Apr. | |
Miscellanous cash payments | $25,000 | $30,000 | $22,000 | $32,000 |
Nov. | Dec. | Jan. | Feb. | Mar. | Apr. | |
Sales | $200,000 | $325,000 | $250,000 | $240,000 | $260,000 | $270,000 |
Assume Company A collects 20% of its sales in the month of the sale, 50% the next month, 25% the following month, and 5% is never collected.
Dec. | Jan. | Feb. | Mar. | Apr. | |
Purchases | $210,000 | $150,000 | $170,000 | $180,000 | $190,000 |
Assume Company A makes cash payments of 40% o fits purchases in the month of the purchase and pays the remaining 60% the following month.
(QUESTION 1) Use the above information, to construct a cash budget for Company A for January through April. Company A began January with a cash balance of $100,000. (Include formulas used to solve problem).
Cash Budget - The following information applies to Company B:
Jan | Feb | Mar | Apr | |
Miscellaneous cash payments | $15,000 | $18,000 | $27,000 | $29,000 |
Nov. | Dec. | Jan. | Feb. | Mar. | Apr. | |
Sales | $440,000 | $500,000 | $450,000 | $480,000 | $500,000 | $430,000 |
Assume Company B collects 35% of its sales in the month of the sale, 40% the next month, 15% the following month, adn 10% is never collected.
Dec. | Jan. | Feb. | Mar. | Apr. | |
Purchases | $350,000 | $310,000 | $330,000 | $340,000 | $300,000 |
Assume Company B makes cash payments of 35% of its purchases in the month of the purchase and pays the remaining 65% the following month.
(QUESTION 2) Use the above information, to consutruct a cash budget for Company B for January through April. Company B began January with a cash balance of $65,000. (Include formulas used to solve problem).
I have uploaded the solution showing formulas in excel. Please apply the formulas to arrive at the answer. Also I have shown the answer in the image separately.