Question

Cash Budget—Basic

  Grenoble Enterprises had sales of 49,700 in March and $60,200 in April. Forecast sales for​ May, June, and July are $69,700​,$79,600​,

and $100,500​,respectively. The firm has a cash balance of $5,300 on May 1 and wishes to maintain a minimum cash balance of

$5,300. Given the following​ data, prepare and interpret a cash budget for the months of​ May, June, and July.​(1) The firm makes

15% of sales for​ cash,55% are collected in the next​ month, and the remaining 30% are collected in the second month following sale.  ​

(2) The firm receives other income of $1,500 per month.  ​

(3) The​ firm's actual or expected​ purchases, all made for​ cash, are $50,200​, $70,400​, and $79,500 for the months of May through​ July, respectively.  ​

(4) Rent is $3,200 per month

(5) Wages and salaries a 10%of the previous​ month's sales.  ​

(6) Cash dividends of $2,900 will be paid in June.  

​(7) Payment of principal and interest of $4,200 is due in June.  

​(8) A cash purchase of equipment costing $5,900 is scheduled in July.  ​

(9) Taxes of $5,600 are due in June.

Complete the first month of the cash budget for Grenoble Enterprises​ below:  ​(Round to the nearest dollar. Please input all the values in the table before checking your​ answers.)

	March		April		May
Sales	$	49,700	$	60,200	$	69,700
Cash sales		7,455		9,030	$
Lag 1 month					$
Lag 2 months					$
Other income					$
Total cash receipts					$

​(Round to the nearest dollar. Please input all the values in the table before checking your​ answers.)

	March		April		May
Disbursements
Purchases					$
Rent					$
Wages and salaries					$
Dividends					$
Principal and interest					$
Purchase of new equipment					$
Taxes due					$
Total cash disbursements					$

​(Round to the nearest dollar. Please input all the values in the table before checking your​ answers.)

	March		April		May
Net cash flow					$
Add: Beginning cash					$
Ending cash					$
Minimum cash					$
Required total financing (notes payable)					$
Excess cash balance (marketable securities)					$

Complete the second month of the cash budget for Grenoble Enterprises​ below:  ​(Round to the nearest dollar. Please input all the values in the table before checking your​ answers.)

	April		May		June
Sales	$	60,200	$	69,700	$	79,600
Cash sales					$
Lag 1 month					$
Lag 2 months					$
Other income					$
Total cash receipts					$

​(Round to the nearest dollar. Please input all the values in the table before checking your​ answers.)

	April		May		June
Disbursements
Purchases					$
Rent					$
Wages and salaries					$
Dividends					$
Principal and interest					$
Purchase of new equipment					$
Taxes due					$
Total cash disbursements					$

​(Round to the nearest dollar. Please input all the values in the table before checking your​ answers.)

	April		May		June
Net cash flow					$
Add: Beginning cash					$
Ending cash					$
Minimum cash					$
Required total financing (notes payable)					$
Excess cash balance (marketable securities)					$

Complete the third month of the cash budget for Grenoble Enterprises​ below:  ​(Round to the nearest dollar. Please input all the values in the table before checking your​ answers.)

	May		June		July
Sales	$	69,700	$	79,600	$	100,500
Cash sales					$
Lag 1 month					$
Lag 2 months					$
Other income					$
Total cash receipts					$

​(Round to the nearest dollar. Please input all the values in the table before checking your​ answers.)

	May		June		July
Disbursements
Purchases					$
Rent					$
Wages and salaries					$
Dividends					$
Principal and interest					$
Purchase of new equipment					$
Taxes due					$
Total cash disbursements					$

Answer 1

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W ? v ENG 01:43 20-02-2020 22 fix X DL DM DN Do DP DO DR DS DT DU ov o DT785 DK 785 786 787 788 789 790 GRENOBLE 791 MAR 49700 7455 APR 60200 9030 27335 792 793 MAY 69700 10455 33110 14910 1500 59975 TOTAL SALES CASH SALES (15% OF SALES) LAG 1 MONTH (55% OF SALES) LAG 2 MONTH (30% OF SALES) OTHER INCOME TOTAL CASH RECEIPTS JUNE 79600 11940 38335 18060 1500 69835 JULY 100500 15075 43780 20910 1500 81265 794 795 796 STEP 1 797 798 MAR APR 799 MAY 50200 3200 6020 JULY 79500 3200 7960 800 801 802 JUNE 70400 3200 6970 2900 4200 DISBURSEMENTS PURCHASES RENT WAGES & SALARIES DIVIDENDS PRINCIPAL & INTEREST PURCHASE OF NEW EQUIPMENT TAXES DUE TOTAL CASH DISBURSEMENTS (10% OF 60200)----> 803 804 5900 805 5600 93270 STEP 2 59420 96560 806 807 808 ... CASH BUDGET budget 45 days cycle ROE, BV MV ratio VARIANCE BEP, OL FL ratios DETROIT float B-S profit loss SALES BUDGET dupont ... :

W ? v I . * 01:43 ENG 20-02-2020 22 fx DT830 1 X DL DK DM D N DO DPDQ DR DS DE DU DV - 807 808 809 810 811 812 A В A-B ADD TOTAL CASH RECEIPTS TOTAL CASH DISBURSEMENTS NET CASH FLOW BEGINNING CASH ENDING CASH MINIMUM CASH REQUIRED TOTAL FINANCING EXCESS CASH BALANCE 59975 59420 555 5300 5855 5300 69835 93270 -23435 5855 -17580 5300 22880 0 81265 96560 -15295 -17580 -32875 5300 38175 (32875 +5300) 0 813 814 815 0 816 817 555 [5855-5300) [17580 +5300) 818 819 820 821 824 826 827 828 829 830 ... CASH BUDGET budget 45 days cycle ROE, BV MV ratio VARIANCE BEP, OL FL ratios DETROIT float B-S profit loss SALES BUDGET dupont ..