Solution:
Part 1 –
a) Beginning cash balance 1st qtr = $36,900
b) Cash receipts and total cash receipts
Cash Receipts (1st Quarter) |
$$ |
Collections from client |
282900 |
Investment Income |
$5,000 |
Total Cash Receipts |
$287,900 |
c) Total available Cash
Total available cash |
$$ |
Beginning cash balance |
$36,900 |
Plus: Total Cash receipts |
$287,900 |
Total available cash |
$324,800 |
d) Disbursement and total cash disbursement
Total Cash Disbursement (1st Qtr) |
$$ |
Salaries per quarter |
$172,200 |
Administrative expenses (excluding depreciation) |
$59,040 |
Overhead costs |
$92,250 |
Purchase of computer equipment |
$61,500 |
Mortgage note payable (738*3) |
$2,214 |
Total cash disbursements |
$387,204 |
e)
Excess (deficiency) of available cash |
|
Total cash available |
$324,800 |
Less: Total cash disbursements |
-$387,204 |
Deficiency of cash |
-$62,404 |
f) Yes there is a need of financing. Since the available cash is less than estimated cash disbursements.
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