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This document presents a cash budget for Phototec, Inc. for the second year of operations. It includes schedules of expected cash collections from sales and cash disbursements for merchandise purchases on a quarterly basis. It also shows the budgeted income statement, expenses, and cash disbursements by quarter. Finally, it presents the full cash budget for the year, showing expected cash balances, collections, disbursements, financing activities, and ending cash balances by quarter.

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58 views6 pages

261ch9other Docsdfgs

This document presents a cash budget for Phototec, Inc. for the second year of operations. It includes schedules of expected cash collections from sales and cash disbursements for merchandise purchases on a quarterly basis. It also shows the budgeted income statement, expenses, and cash disbursements by quarter. Finally, it presents the full cash budget for the year, showing expected cash balances, collections, disbursements, financing activities, and ending cash balances by quarter.

Uploaded by

Kia Potts
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Problem 9-13 (60 minutes)

1. Schedule of cash receipts:


Cash salesJune.....................................................
$60,000
Collections on accounts receivable:
May 31 balance....................................................
72,000
June (50% 190,000)...........................................
95,000
Total cash receipts...................................................
$227,000
Schedule of cash payments for purchases:
May 31 accounts payable balance...........................
$90,000
June purchases (40% 200,000)............................
80,000
Total cash payments................................................
$170,000
PHOTOTEC, INC.
Cash Budget
For the Month of June
Cash balance, beginning.........................................
$ 8,000
Add receipts from customers (above)......................
227,000
Total cash available.................................................
235,000
Less disbursements:
Purchase of inventory (above)..............................
170,000
Operating expenses..............................................
51,000
Purchases of equipment........................................
9,000
Total cash disbursements........................................
230,000
Excess of receipts over disbursements....................
5,000
Financing:
Borrowingsnote..................................................
18,000
Repaymentsnote................................................
(15,000)
Interest.................................................................
(500)
Total financing.........................................................
2,500
Cash balance, ending..............................................
$ 7,500

Problem 9-13 (continued)


2.

PHOTOTEC, INC.
Budgeted Income Statement
For the Month of June
Sales.......................................................................
$250,000
Cost of goods sold:
Beginning inventory..............................................
$30,000
Add purchases......................................................
200,000
Goods available for sale........................................
230,000
Ending inventory...................................................
40,000
Cost of goods sold................................................190,000
Gross margin........................................................... 60,000
Operating expenses ($51,000 +
$2,000)................................................................. 53,000
Net operating income.............................................. 7,000
Interest expense.....................................................
500
Net income..............................................................
$ 6,500

3.

PHOTOTEC, INC.
Budgeted Balance Sheet
June 30
Assets
Cash........................................................................
$ 7,500
Accounts receivable (50% 190,000).................... 95,000
Inventory................................................................. 40,000
Buildings and equipment, net of depreciation
($500,000 + $9,000 $2,000)..............................507,000
Total assets.............................................................
$649,500
Liabilities and Equity
Accounts payable (60% 200,000)........................
$120,000
Note payable........................................................... 18,000
Capital stock...........................................................420,000
Retained earnings ($85,000 + $6,500).................... 91,500
Total liabilities and equity........................................
$649,500

Problem 9-18 (60 minutes)


1. a. Schedule of expected cash collections:

Year 1Fourth quarter sales:


$300,000 65%
Year 2First quarter sales:
$400,000 33%
$400,000 65%
Year 2Second quarter sales:
$500,000 33%
$500,000 65%
Year 2Third quarter sales:
$600,000 33%
$600,000 65%
Year 2Fourth quarter sales:
$480,000 33%
Total cash collections

First

Year 2 Quarter
Second
Third

Fourth

$195,000
132,000

$260,00
0
165,000

$325,00
0
198,000

$390,00
0

158,400
$425,00 $523,00 $548,40
$327,000
0
0
0

Problem 9-18 (continued)


b. Schedule of budgeted cash disbursements for merchandise
purchases:

Year 1Fourth quarter


purchases:
$180,000 80%
Year 2First quarter
purchases:
$260,000 20%
$260,000 80%
Year 2Second quarter
purchases:
$310,000 20%
$310,000 80%
Year 2Third quarter
purchases:
$370,000 20%
$370,000 80%
Year 2Fourth quarter
purchases:
$240,000 20%
Total cash disbursements

First

Year 2 Quarter
Second
Third

Fourth

$144,000
52,000

$208,00
0
62,000

$248,00
0
74,000

$296,00
0

48,000
$270,00 $322,00 $344,00
$196,000
0
0
0

Problem 9-18 (continued)


2.
First
Budgeted sales
Variable expense rate
Variable expenses
Fixed expenses
Total expenses
Less depreciation

$400,000
12%
48,000
90,000
138,000
20,000

Cash disbursements

$118,000

Year 2 Quarter
Second
Third
$500,00 $600,00
0
0
12% 12%
60,000 72,000
90,000 90,000
150,000 162,000
20,000 20,000
$130,00 $142,00
0
0

Fourth
$480,00
0
12%
57,600
90,000
147,600
20,000
$127,60
0

Year
$1,980

1
237,6
360,0
597,6
80,0
$ 517

Problem 9-18 (continued)


3. Cash budget for Year 2:

Cash balance, beginning


Add collections from sales
Total cash available
Less disbursements:
Merchandise purchases
Operating expenses
Dividends
Land
Total disbursements
Excess (deficiency) of receipts
over disbursements
Financing:
Borrowings
Repayments
Interest*
Total financing
Cash balance, ending
*60,000 10% 9/12 = $4,500.

Year 2 Quarter
First
Second
Third
Fourth
$
$
20,000 $23,000
18,000 $18,500 $
327,000 425,000 523,000 548,400
347,000 448,000 541,000 566,900

196,000 270,000 322,000 344,000 1


118,000 130,000 142,000 127,600
10,000 10,000
10,000 10,000
0 80,000
48,500
0
324,000 490,000 522,500 481,600
23,000 (42,000)
0
0

60,000
0

0 60,000
$
23,000 $18,000

18,500

85,300

0
0
0 (60,000)
(4,500
0
)
(64,500
0
)
$
18,500 $20,800 $

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