Problem 8-23 (Algo) Schedule of Expected Cash Collections; Cash Budget [LO8-2, LO8-8] The president of the retailer Prim

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Problem 8-23 (Algo) Schedule of Expected Cash Collections; CashBudget [LO8-2, LO8-8]
The president of the retailer Prime Products has just approachedthe company's bank with a request for a $63,000, 90-day loan. Thepurpose of the loan is to assist the company in acquiringinventories. Because the company has had some difficulty in payingoff its loans in the past, the loan officer has asked for a cashbudget to help determine whether the loan should be made. Thefollowing data are available for the months April through June,during which the loan will be used:
On April 1, the start of the loan period, the cash balance willbe $42,000. Accounts receivable on April 1 will total $168,000, ofwhich $144,000 will be collected during April and $19,200 will becollected during May. The remainder will be uncollectible.

Problem 8 23 Algo Schedule Of Expected Cash Collections Cash Budget Lo8 2 Lo8 8 The President Of The Retailer Prim 1 (22.04 KiB) Viewed 8 times

Merchandise purchases are paid in full during the monthfollowing purchase. Accounts payable for merchandise purchasesduring March, which will be paid in April, total $161,000.
In preparing the cash budget, assume that the $63,000 loan willbe made in April and repaid in June. Interest on the loan willtotal $980.

Problem 8 23 Algo Schedule Of Expected Cash Collections Cash Budget Lo8 2 Lo8 8 The President Of The Retailer Prim 2 (14.78 KiB) Viewed 8 times

Required:
1. Calculate the expected cash collections for April, May, andJune, and for the three months in total.
Sales (all on account) Merchandise purchases Payroll Lease payments Advertising Equipment purchases Depreciation April $ 286,000 218,000 $ 32,800 $ $ 41,000 $ 68,600 $ 34,000 May $ 664,000 $ 248,500 $ 32,800 $ 41,000 $ 68,600 $ 34,000 June $ 315,000 $ 161,500 $ 22,400 $ 41,000 $ 52,800 $ 64,000 $ 34,000
Required 1 Required 2 Calculate the expected cash collections for April, May, and June, and for the three months in total. Schedule of Expected Cash Collections May April Total cash collections June Quarter
Required 1 Required 2 Prepare a cash budget, by month and in total, for the three-month period. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Beginning cash balance Add receipts: Collections from customers Total cash available Less cash disbursements: Merchandise purchases Payroll Lease payments Advertising Equipment purchases Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Prime Products Cash Budget April Total financing Ending cash balance FA $ 0 0 0 0 0 May 0 0 0 0 $ June 0 0 0 0 0 FA $ Quarter 0 0 0 0 0