Question

The president of the retaller Prime Products has just approached the company s bank with a request for a $79,00, 9U-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some difficulty in paying off its loans in the past, the loan officer has asked for a cash budget to help determine whether the loan should be made. The following data are available for the months April through June, during which the loan will be used: a. On April 1, the start of the loan period, the cash balance will be $16,500. Accounts receivable on April 1 will total $190,400, of which $163,200 will be collected during April and $21,760 will be collected during May. The remainder will be uncollectible. b. Past experience shows that 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% is bad debts that are never collected. Budgeted sales and expenses for the three- month period follow: Sales (all on account) Merchandise purchases Payroll Lease payments Advertising Equipment purchases Depreciation April May June $ 312,000 $ 428,000 $319,000 $ 204,000 $ 162,000 $ 178,500 $ 24,000 $ 24,000 $ 18,900 $ 24,800 $ 24,800 $ 24,800 $ 79,200 $ 79,200 $ 74,480 - $ 78,000 $ 17,200 $ 17,200 $ 17,200 c. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid in April, total $160,000. d. In preparing the cash budget, assume that the $79,000 loan will be made in April and repaid in June. Interest on the loan will total $1,140.
please help me find the quarter

Answer 1

Expected Cash collections
	April	May	June	Quarter
Sales	312,000	428,000	319,000	1,059,000
Collections:
30% in same month	93,600	128,400	95,700	317,700
60% in following month	163,200	187,200	256,800	607,200
8% in second month following sale		21,760	24,960	46,720
Total collections	256,800	337,360	377,460	971,620
2.Cash Budget
	April	May	June	Total
Beginning Cash Balance	16,500	64,300	69,660	16,500
Add: Collections	256,800	337,360	377,460	971,620
Cash available	273,300	401,660	447,120	988,120
Less: Payments
Purchases	160,000	204,000	162,000	526,000
Payroll	24,000	24,000	18,900	66,900
Lease	24,800	24,800	24,800	74,400
Advertising	79,200	79,200	74,480	232,880
Equipment Purchase			78,000	78,000
Total Disbursements	288,000	332,000	358,180	978,180
Excess/Deficiency	-14,700	69,660	88,940	9,940
Financing
Borrowing	79,000			79,000
Repayment			-79,000	-79,000
Interest			-1,140	-1,140
Total Financing	79,000		-80,140	-1,140
Ending Cash Balance	64,300	69,660	8,800	8,800
Note: Depreciation is a non-cash expense and hence is not taken into cash budget