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MGMT-6005 Group Assignment #5 Refer Chapter 15 - Problems 15-10 and 15-11 (pp. 563-564) Topic: Cash Budgeting, Financial Plan

15-10 CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. S

Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; col

General and administrative salaries are approximately $27,000 a month. Lease payments under long-term leases are $9,000 a mon

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Answer #1
a.Cash Budget For The Month (May 16' -Jan 17')
Particulars May 16' June 16' July 16' Aug 16' Sep 16' Oct 16' Nov 16' Dec 16' Jan 17'
Opening Balance =(132000-65600 For May 16') 128400 107700 132000 201300 387600 90000 90000 208500 277800
(A) Collection
Cash Sales 18000 18000 36000 54000 72000 36000 36000 9000 18000
Collection From customers 0 135000 162000 297000 459000 621000 378000 324000 121500
Total Collection (A) 146400 260700 330000 552300 918600 747000 504000 541500 417300
(B)Payments
Payment for Labor And Raw Materials 0 90000 90000 126000 882000 306000 234000 162000 90000
General and adm. Salaries 27000 27000 27000 27000 27000 27000 27000 27000 27000
Lease Payment under Long term Lease 9000 9000 9000 9000 9000 9000 9000 9000 9000
Misc. Exp. 2700 2700 2700 2700 2700 2700 2700 2700 2700
Income Tax Payment 0 0 0 0 63000 0 0 63000 0
Payment for New Design studio 0 0 0 0 0 180000 0 0 0
Total Payments (B) 38700 128700 128700 164700 983700 524700 272700 263700 128700
Cash Balance (A-B) 107700 132000 201300 387600 -65100 222300 231300 277800 288600
Bank Overdraft Required 155100
Minimum Cash Balance Tobe kept (for November) 90000
Bank Overdraft made 132300 22800
Ramaining O/D 22800 Nil
Remaining cash (for December) 208500
Calculation of collection From Debtors
May 16' June 16' July 16' Aug 16' Sep 16' Oct 16' Nov 16' Dec 16' Jan 17'
0 135000 27000 27000 54000 81000 108000 54000 54000
135000 270000 405000 540000 270000 270000 67500
135000 162000 297000 459000 621000 378000 324000 121500
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