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How do you compete the Cash Budget? Everything must be in the same format in the table. Someone from Chegg sent wrong answers before. Let me know if you can help. I really would appreciate your help.
Davis Dry Goods distributes silk ties. You are charge of creating DavisAc€?c master budget for the upcoming second quarter, April Ac€?o June 2015.
Davis desires a minimum ending cash balance of each month $11,000. The ties are sold to retailers for $9 each. Recent and forecasted sales in units are as follows:
January (actual)Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦..20,000
February (actual)Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦.. 24,000
March (actual)Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦ 28,000
April Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦. 35,000
MayAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦ 45,000
JuneAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦..60,000
July Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦ 40,000
August Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦ 36,000
SeptemberAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦..Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦.32,000
The large buildup in sales before and during June is due to FatherAc€?cs Day. Ending inventories are supposed to equal 90% of the next monthAc€?cs sales in units. The ties cost the company $5 each.
Purchases are paid for as follows: 50% in the month of purchases and the remaining 50% in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 25% of a monthAc€?cs sales are collected by monthend. An additional 75% is collected in the following month. Bad debts have been negligible.
The companyAc€?cs monthly selling and administrative expenses are given below:
Variable:
SalesAc€?cs commissionsAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦..$1 per tie
Fixed:
Wages and salariesAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦22,000
UtilitiesAc€¦Ac€¦Ac€¦Ac€¦.Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦.14,000
InsuranceAc€¦Ac€¦..Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦1,200
DepreciationAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦1,500
MiscellaneousAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦.3,000
All selling and administrative expenses are paid during the month, in cash, with the exception of depreciation and insurance expired.
Davis has an agreement with the bank that allows it to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $11,000 in cash.
Land will be purchased during May for $25,000 cash. Davis declares and pays dividends of $11,000 in the first month each quarter. The companyAc€?cs balance sheet at March 31 is given below:
Assets
CashAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦ $10,000
Accounts receivableAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦..Ac€¦.Ac€¦.. 189,000
Inventory (31,500 ties) Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦ 157,500
Prepaid Insurance Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦..Ac€¦.. 14,400
Fixed assets, netAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦.Ac€¦..203,700
Total Assets Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦574,600
Liabilities and Stock holdersAc€?c Equity
Accounts PayableAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦..$85,750
Capital StockAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦,,Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦312,000
Retained EarningsAc€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦.Ac€¦Ac€¦Ac€¦.176,850
Total Liabilities and StockholdersAc€?c EquityAc€¦Ac€¦...............574,600
Davis Dry Goods Schedule of Expected Cash Collections For Quarter Ending June 2015 

April 
May 
June 
Quarter 

February Sales 
54,000 
0 
0 
54,000 
March Sales 
189,000 
63,000 
0 
252,000 
April Sales 
78,750 
236,250 
78,750 
393,750 
May Sales 
0 
101,250 
303,750 
405,000 
June Sales 
0 
0 
135,000 
135,000 
Total Cash Sales 
321,750 
400,500 
517,500 
1,239,750 
Davis Dry Goods Cash Budget For the Quarter Ending June 30, 2015 

April 
May 
June 

Cash Balance, Beginning 
10,000 

Add Receipts from Customers (Part 1b) 
321,750 
400,500 
517,500 
Total Cash Available 
331,750 

Less Disbursements: 

Inventory Purchases (Part 1d) 
195,750 
256,250 
251,250 
Selling Expenses 
35,000 
45,000 
60,000 
Salaries and Wages 
22,000 
22,000 
22,000 
Utilities 
14,000 
14,000 
14,000 
Miscellaneous 
3,000 
3,000 
3,000 
Dividends Paid 
11,000 
0 
0 
Land Purchases 
0 
25,000 
0 
Total Disbursements 
280,750 
365,250 
350,250 
Excess (Deficiency) of Receipts Over Disbursements 
(51,000) 

Financing: 

Net Cash from Borrowings 
0 

Repayments* 
0 
0 

Interests 
0 
0 

Net Financing 

Cash Balance, Ending 
Maximum amount (in increments of $1,000) that the company could repay to the bank and still have at leat a $11,000 ending balance.
To compute the interest for June, here is the format;
April amount from Borrowings x 1% x 3 = ?
May amount from Borrowings x 1% x 2 = ?
The total interest amount for April + May will be listed under "Interests" in the Financing section
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