本文发表在 rolia.net 枫下论坛Roller,Ltd., of Melbourne, Australia, is the exclusive distributor in Australia and the South Pacific of a popular brand of in-line skates manufactured in Mexico. The company is in the process of putting together its cash budget for the second quarter-April, May, and June-of next year. The president of the company suspects that some financing will be required in the second quarter because sales are expanding and the company intends to make several major equipment purchases in the quarter. The president is confident that the company will be able to meet or exceed the following budgeted sales figures (all in Australian dollars) next year:
January $158,000 July $190,000
February $160,000 August $192,000
March $164,000 September $210,000
April $172,000 October $230,000
May $176,000 November $260,000
June $184,000 December $180,000
The following additional information will be used in formulating the cash budget:
a. All of the company’s sales are on credit terms. The company collects 30% of its billings in the month after the sale and the remaining 70% in the second month after the sale. Uncollectible accounts are negligible.
b. The cost of sales is 75% of sales. Because of the shipping time from Mexico, the company orders skates from the manufacturer one month in advance of their expected sale. Roller, Ltd., desires to maintain little or no inventory.
c. The company orders the skates on credit terms from the manufacturer. The company pays half of the bill in the month after it orders the skates and the other half in the second month after it places the order.
d. Operating expenses, other than cost of sales, are budgeted to be $178,800 for the year. The composition of these expenses is given below. All of these expenses are incurred evenly throughout the year except for the property taxed. Property taxes are paid in four equal installments in the last month of each quarter.
Salaries and wages $120,000
Advertising and promotion $12,000
Property taxes $18,000
Insurance $4,800
Utilities $6,000
Depreciation $18,000
Total operating expenses $178,800
e. Income tax payments are made by the company in the first month of each quarter based on the taxable income for the prior quarter. The income tax payment due in April is $16,000
f. Because of expanding sales, the company plans to make equipment purchases of $22,300 in April and $29,000 in May. These purchases will not affect depreciation for the year.
g. The company has a policy of maintaining an end-of-month cash balance of $20,000. Cash is borrowed or invested monthly, as needed, to maintain this balance. All borrowing is done at the beginning of the month, and all investments and repayments are made at the end of the month. As of March 31, there are no investments of excess cash and no outstanding loans.
h. The annual interest rate on loans from the bank if 12%. Compute interest on whole months (1/12, 2/12, and so forth). The company will pay off any loans, including accumulated interest, at the end of the second quarter if sufficient cash is available.
Question:
1. Prepare a cash budget for Roller, Ltd., by month and in total for the second quarter
2. Discuss why cash budgeting is particularly important for an expanding company like Roller, Ltd.更多精彩文章及讨论，请光临枫下论坛 rolia.net
January $158,000 July $190,000
February $160,000 August $192,000
March $164,000 September $210,000
April $172,000 October $230,000
May $176,000 November $260,000
June $184,000 December $180,000
The following additional information will be used in formulating the cash budget:
a. All of the company’s sales are on credit terms. The company collects 30% of its billings in the month after the sale and the remaining 70% in the second month after the sale. Uncollectible accounts are negligible.
b. The cost of sales is 75% of sales. Because of the shipping time from Mexico, the company orders skates from the manufacturer one month in advance of their expected sale. Roller, Ltd., desires to maintain little or no inventory.
c. The company orders the skates on credit terms from the manufacturer. The company pays half of the bill in the month after it orders the skates and the other half in the second month after it places the order.
d. Operating expenses, other than cost of sales, are budgeted to be $178,800 for the year. The composition of these expenses is given below. All of these expenses are incurred evenly throughout the year except for the property taxed. Property taxes are paid in four equal installments in the last month of each quarter.
Salaries and wages $120,000
Advertising and promotion $12,000
Property taxes $18,000
Insurance $4,800
Utilities $6,000
Depreciation $18,000
Total operating expenses $178,800
e. Income tax payments are made by the company in the first month of each quarter based on the taxable income for the prior quarter. The income tax payment due in April is $16,000
f. Because of expanding sales, the company plans to make equipment purchases of $22,300 in April and $29,000 in May. These purchases will not affect depreciation for the year.
g. The company has a policy of maintaining an end-of-month cash balance of $20,000. Cash is borrowed or invested monthly, as needed, to maintain this balance. All borrowing is done at the beginning of the month, and all investments and repayments are made at the end of the month. As of March 31, there are no investments of excess cash and no outstanding loans.
h. The annual interest rate on loans from the bank if 12%. Compute interest on whole months (1/12, 2/12, and so forth). The company will pay off any loans, including accumulated interest, at the end of the second quarter if sufficient cash is available.
Question:
1. Prepare a cash budget for Roller, Ltd., by month and in total for the second quarter
2. Discuss why cash budgeting is particularly important for an expanding company like Roller, Ltd.更多精彩文章及讨论，请光临枫下论坛 rolia.net