Question

Crane Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. Carol Jones, the firm’s marketing director, has completed the following sales forecast.

Crane Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. Carol Jones, the firm's marketing director, has completed following sales forecast. Month January February March April May June Sales $903,800 $1,001,200 $903,800 $1,150,300 $1,252,100 $1,407,500 Month July August September October November December Sales $1,501,000 $1,501,000 $1,604,500 $1,604,500 $1,501,000 $1,700,900 Phillip Smith, an accountant in the Planning and Budgeting Department, is responsible for preparing the cash flow projection. He has gathered the following information.

Answer 1

1. Cash Receipts Budget. Pariculars May June April $ 4,00,480 $ 5,42,280 February Sales March Sales April Sales May Sales Totals $ $ 3,61,520 6,90,180 Total Cash Receipts $ 4,00,480 $ 9,03,800 $ 11,50,300 $ 7,51,260 $32,05,840 $ 4,60,120 $ 7,51,260 $ 12,11,380 $9,42,760 $ 10,51,700 Accounts Receivables Balance at the end of 2nd Quarter of 2015 is $ 1,908,340. 2. Purchases Budget. Pariculars May May June April April $ 1,38,036 $ 3,50,588 April COGS May COGS June COGS July COGS Totals $ $ 1,50,252 3,94,100 Total Purchases $ 1,38,036 $ 5,00,840 $ 5,63,000 $ 4,20,280 $ 16,22,156 $ 1,68,900 $ 4,20,280 $ 5,89,180 $ 4,88,624 $ 5,44,352 3. Cash Payments Budget. Pariculars March Purchases April Purchases May Purchases June Purchases Totals April May June $ 1,07,635 $ 3,66,468 $ 1,22,156 $ 4,08,264 $ 1,36,088 $ 4,41,885 $4,74,103 $ 5,30,420 $ 5,77,973 Accounts Payables Balance at the end of 2nd Quarter of 2015 is $ 147,295.

4. Cash Budget. Particulars Beginning Cash Balance Collection from Sales Total Cash available to spend April $ 50,300 $ 9,42,760 $ 9,93,060 May June $ 50,369 $ 50,860 $ 10,51,700 $ 12,11,380 $ 11,02,069 $ 12,62,240 Quarter $ 50,300 $ 32,05,840 $ 32,56,140 Less : Disbursements Wages Salaries Advertising Property Taxes Insurance Utilities Income Taxes Payment for Inventory Total Cash Disbursements $ 3,45,090 $ 26,983 $ 31,192 $ - $ 16,217 $ 14,867 $ 1,29,240 $ 4,74,103 $10,37,691 $ $ $ $ $ $ $ $ $ 3,75,630 $ 4,22,250 26,983 $ 26,983 31,192 $ 31,192 - $ 36,275 16,217 $ 16,217 14,867 $ 14,867 - 5,30,420 $ 5,77,973 9,95,308 $ 11,25,756 $ 11,42,970 $ 80,950 $ 93,575 $ 36,275 $ 48,650 $ 44,600 $ 1,29,240 $ 15,82,496 $ 31,58,756 Cash Excess / (Deficiency) Minimum Cash Balance Cash Excess (Needed) $ $ $ -44,631 50,000 94,631 $ $ $ 1,06,760 50,000 -56,760 $ $ $ 1,36,484 50,000 -86,484 $ $ $ 97,384 50,000 -47,384 Financing : Interest Repayments Borrowings Total Financing $ $ $ $ -1,900 -54,000 $ $ 410 -41,000 - - 95,000 95,000 $ $ $ $ -1,490 -95,000 95,000 -1,490 A $ $ -55,900 $ -40,590 Ending Cash Balance $ 50,369 $ 50,860 $ 95,894 $ 95,894

1. Cash Receipts Budget. Pariculars May June April $ 4,00,480 $ 5,42,280 February Sales March Sales April Sales May Sales Totals $ $ 3,61,520 6,90,180 Total Cash Receipts $ 4,00,480 $ 9,03,800 $ 11,50,300 $ 7,51,260 $32,05,840 $ 4,60,120 $ 7,51,260 $ 12,11,380 $9,42,760 $ 10,51,700 Accounts Receivables Balance at the end of 2nd Quarter of 2015 is $ 1,908,340. 2. Purchases Budget. Pariculars May May June April April $ 1,38,036 $ 3,50,588 April COGS May COGS June COGS July COGS Totals $ $ 1,50,252 3,94,100 Total Purchases $ 1,38,036 $ 5,00,840 $ 5,63,000 $ 4,20,280 $ 16,22,156 $ 1,68,900 $ 4,20,280 $ 5,89,180 $ 4,88,624 $ 5,44,352 3. Cash Payments Budget. Pariculars March Purchases April Purchases May Purchases June Purchases Totals April May June $ 1,07,635 $ 3,66,468 $ 1,22,156 $ 4,08,264 $ 1,36,088 $ 4,41,885 $4,74,103 $ 5,30,420 $ 5,77,973 Accounts Payables Balance at the end of 2nd Quarter of 2015 is $ 147,295.

4. Cash Budget. Particulars Beginning Cash Balance Collection from Sales Total Cash available to spend April $ 50,300 $ 9,42,760 $ 9,93,060 May $ 50,369 $ 10,51,700 $ 11,02,069 June $ -5,900 $ 12,11,380 $ 12,05,480 Quarter $ 50,300 $ 32,05,840 $ 32,56,140 Less : Disbursements Wages Salaries Advertising Property Taxes Insurance Utilities Income Taxes Payment for Inventory Total Cash Disbursements $ 3,45,090 $ $ 26,983 $ $ 31,192 $ $ - $ $ 16,217 $ $ 14,867 $ $ 1,29,240 $ $ 4,74,103 $ $10,37,691 $ 3,75,630 $ 4,22,250 $ 11,42,970 26,983 $ 26,983 $ 80,950 31,192 $ 31,192 $ 93,575 - $ 36,275 $ 36,275 16,217 $ 16,217 $ 48,650 14,867 $ 14,867 $ 44,600 $ 1,29,240 5,30,420 $ 5,77,973 $ 15,82,496 9,95,308 $ 11,25,756 $ 31,58,756 Cash Excess / (Deficiency) Minimum Cash Balance Cash Excess (Needed) $ $ $ -44,631 $ 50,000 $ 94,631 $ 1,06,760 50,000 -56,760 $ $ $ 79,724 50,000 -29,724 $ $ $ 97,384 50,000 -47,384 $ Financing : Interest Repayments Borrowings Total Financing A $ $ - $ -1,900 $ $ -54,000 $ 95,000 $ -56,760 $ 95,000 $ -1,12,660 $ 410 -41,000 -29,724 -70,314 $ $ $ $ -1,490 -95,000 8,516 -87,974 Ending Cash Balance $ 50,369 $ -5,900 $ 9,410 $ 9,410