Question

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

Answer 1

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