Question

follow The firm makes 14% of all sales for cash and collects on 43% of its sales in each of the 2 months following the sale. Other cash inflows are expected to be $13,000 in September and April $17,000 in January and 000 in September and Apri, $17,000 in January and March, and $26,000 n February. The f pays cash for 9% of its purchases. It pays for 53% o s purchases in e o ing month and for 38% of its purchases 2 months later ages and s aries amount to 21% o he eding month's sales. Rent of $22,000 per month must be paid. Interest payments of $12.000 are due in January and April. A principal payment of $33,000 is also due in April. The firm expects to pay cash dividends of $20,000 in January and April. Taxes of $79,000 are due in April. The firm also intends to make a $27,000 cash purchase of fixed assets in December. a. Assuming that the firm has a cash balance of $22,000 at the beginning of November, determine the end-of-month cash balances for each month, November through April b. Assuming that the firm wishes to maintain a S15,000 minimum cash balance, determine the required total financing or ex c. If the firm were requesting a line of credit to cover needed financing for the period November to April, how large would this line have to be? Explain your answer xcess cash balance for each month, November through April a. Assuming that the firm has a cash balance of $22,000 at the beginning of November, determine the end-of-month cash balances for each month, November through April. Complete the November cash budget for Xenocore, Inc. below: (Round to the nearest dollar.)

Answer 1

Xenocore Inc. Cash Budget For November, 2015
	September	October	November
Forecast Sales	$ 206,000	$ 254,000	$ 168,000
Cash Sales			23,520
Collections
Lag 1 month			109,220
Lag 2 month		88,580	88,580
Other Cash Receipts			0
Total Cash Receipts			$ 221,320
Forecast Purchases	$ 122,000	$ 148,000	$ 145,000
Cash Purchases	10,980	13,320	13,050
Lag 1 month			78,440
Lag 2 months		64,660	46,360
Salaries and Wages		43,260	53,340
Rent	22,000	22,000	22,000
Interest Payments			0
Principal Payments			0
Dividends			0
Taxes			0
Purchase of Fixed Assets			0
Total Cash Disbursements			213,190
Total Cash Receipts			221,320
Total Cash Disbursements			213,190
Net Cash Flow			8,130
Beginning Cash Balance			22,000
Ending Cash Balance			$ 30,130