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Cash Budget Problem: Francesca’s Fragrances, Inc. Prepare Cash Budget for April, May, June 2019 Follow the...

Cash Budget Problem: Francesca’s Fragrances, Inc.

Prepare Cash Budget for April, May, June 2019

Follow the following to prepare the budget:

1.         Real Sales 2019:         January                        - $200,000

                                                February                      - $400,000

                                                March                          - $350,000

            Projected for 2019:     April                            - $500,000

                                                May                             - $400,000

                                                June                             - $450,000

            Sales Payment History:           10% cash

                                                            30% Accts. Rec. – collected n/30 days

                                                            60% Accts. Rec. – collected n/60 days

                                                            Bad Debt Expense – negligible

            Other Receipts:

Dividend due the firm - $30,000 in June.

Sale of Common Stock: $200,000 in June

2.         Purchases:       75% of Sales – same month of expected sale.

                                    10% Paid Cash

                                    40% Paid 30 Days

                                    50% Paid 60 Days

            Rent:   $8,000/month

            Wages:   15% Sales + $9,000 Fixed Cost

            Interest Payment:   May = $120,000

Taxes:   $40,000 in June

            Sinking Fund: $15,000 due June

Dividend Payments:   April: $60,000

Capital Investments:   $10,000 in June

            Repurchase or Retirement of Stock – None Anticipated

           

3.         Cash Balances:   @ 3/31 = $50,000; must maintain $35,000 Cash Balance Minimum

Solutions

Expert Solution


since the rate of intrest is not given it is assumed that there is no intrest on borrowings


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