Complete a cash budget for Hoyt, Inc. Hoyt, Inc. has estimated current year sales (in millions)...

Complete a cash budget for Hoyt, Inc.

Hoyt, Inc. has estimated current year sales (in millions) for the next four quarters.

Q1 $240

Q2 $250

Q3 $205

Q4 $350

Sales for the 1st quarter next year is projected to be $230.

Accounts Receivable at the beginning of the year was $100.

Beginning Accounts Payable were $60.

The beginning cash balance is $50.

Hoyt, Inc. cash collection schedule is as follows: 60% of sales in the current

quarter, 40% in the 1st quarter after sales.

Purchases from suppliers in a quarter are equal to 50% of the next quarter’s

forecasted sales

Suppliers are normally paid in 50% in the quarter purchases are made and 50% in the following quarter.

Wages, taxes and other expenses are 20% of current quarter sales

Hoyt, Inc. maintains a minimum cash balance of $30

Solutions

Expert Solution

EXPECTED CASH COLLECTIONS
	Q-1	Q-2	Q-3	Q-4	YEAR
Beginning Accounts receivable	100				100
Quarter-1 Sales	144	96			240
Quarter-2 Sales		150	100		250
Quarter-3 Sales			123	82	205
Quarter-4 Sales				210	210
Total Cash Collections	244	246	223	292	1,005

EXPECTED CASH DISBURSALS
	Q-1	Q-2	Q-3	Q-4	YEAR
Budgeted Purchase in $	125	102.5	175	115
Beginning Accounts payable	60				60
Quarter-1 Purchase	62.5	62.5			125
Quarter-2 Purchase		51.25	51.25		102.5
Quarter-3 Purchase			87.5	87.5	175
Quarter-4 Purchase				57.5	57.5
Total Cash Disbursals	122.5	113.75	138.75	145	520

CASH BUDGET
	Q-1	Q-2	Q-3	Q-4	YEAR
Beginning Balance	50	124	206	249	50
Add: Receipt
Cash Collections-as computed above	244	246	223	292	1,005
Total Cash available	294	370	429	541	1,055

Payments:
Cash disbursement-as computed above	122.5	113.75	138.75	145	520
Labour cost	48	50	41	70	209
Total Disbursals	170.5	163.75	179.75	215	729
Excess/Deficit	124	206	249	326	326
Borrowings	0	0	0	0	0
Ending balance	124	206	249	326	326

ekkarill92 answered 1 year ago

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