Problem 9-16 (30 minutes)
1.
September cash sales ……………………………………….
$ 7,400
September collections on account:
July sales: $20,000 × 18% ………………………………
3,600
August sales: $30,000 × 70% ………………………….
21,000
September sales: $40,000 × 10% …………………….
4,000
Total cash collections ………………………………………..
$36,000
2.
Payments to suppliers:
August purchases (accounts payable) ………………..
$16,000
September purchases: $25,000 × 20% ………………
5,000
Total cash payments …………………………………………
$21,000
3.
Calgon Products
Cash Budget
For the Month of September
Cash balance, September 1 …………………………….
$ 9,000
Add cash receipts:
Collections from customers …………………………..
36,000
Total cash available before current financing ………
45,000
Less disbursements:
Payments to suppliers for inventory ………….……
$21,000
Selling and administrative expenses ……………….
9,000
*
Equipment purchases ………………………………….
18,000
Dividends paid …………………………………………..
3,000
Total disbursements ……………………..………………
51,000
Excess (deficiency) of cash available over
disbursements …………………………………………..
(6,000)
Financing:
Borrowings ……………………………………………….
11,000
Repayments ……………………………………………..
0
Interest ……………………………………………………
0
Total financing …………………………………………….
11,000
Cash balance, September 30 …………………………..
$ 5,000
Problem 9-17 (continued)
3.
Janus Products, Inc.
Cash Budget
For the Quarter Ended September 30
July
August
Sept.
Quarter
Cash balance, beginning ……..
$ 8,000
$ 8,410
$ 8,020
$ 8,000
Add collections from sales
36,160
47,760
59,600
143,520
Total cash available ………….
44,160
56,170
67,620
151,520
Less disbursements:
For inventory purchases ……
30,450
35,250
30,375
96,075
For selling expenses …………
7,200
11,700
8,500
27,400
For administrative expenses
3,600
5,200
4,100
12,900
For land ………………………..
4,500
0
0
4,500
For dividends ………………….
0
0
1,000
1,000
Total disbursements …………..
45,750
52,150
43,975
141,875
Excess (deficiency) of cash
available over
disbursements ………………..
(1,590)
4,020
23,645
9,645
Financing:
Borrowings ……………..……..
10,000
4,000
14,000
Repayment …………………….
0
0
(14,000)
(14,000)
Interest …………………………
0
0
(380)
(380)
Total financing ………………….
10,000
4,000
(14,380)
(380)
Cash balance, ending …………
$ 8,410
$ 8,020
$ 9,265
$ 9,265
*
$10,000 × 1% × 3 =
$300
$4,000 × 1% × 2 =
80
$380
Problem 9-18 (continued)
3.
Janus Products, Inc.
Cash Budget
For the Quarter Ended September 30
July
August
Sept.
Quarter
Cash balance, beginning ……..
$ 8,000
$13,710
$22,020
$ 8,000
Add collections from sales
40,960
52,960
58,400
152,320
Total cash available ………….
48,960
66,670
80,420
160,320
Less disbursements:
For inventory purchases ……
19,950
27,750
34,125
81,825
For selling expenses …………
7,200
11,700
8,500
27,400
For administrative expenses
3,600
5,200
4,100
12,900
For land ………………………..
4,500
0
0
4,500
For dividends ………………….
0
0
1,000
1,000
Total disbursements …………..
35,250
44,650
47,725
127,625
Excess (deficiency) of cash
available over
disbursements ………………..
13,710
22,020
32,695
32,695
Financing:
Borrowings ……………..……..
0
0
0
0
Repayment …………………….
0
0
0
0
Interest …………………………
0
0
0
0
Total financing ………………….
0
0
0
0
Cash balance, ending …………
$13,710
$22,020
$32,695
$ 32,695
4. Collecting accounts receivable sooner and reducing inventory levels
eliminated the company’s need to borrow money and pay interest
during the third quarter.
Problem 9-20 (60 minutes)
1. Schedule of cash receipts:
Cash sales—June ………………………………………..
$ 60,000
Collections on accounts receivable:
May 31 balance …………………….…………………
72,000
June (50% × 190,000) …………………………..….
95,000
Total cash receipts ………………………………………
$227,000
Schedule of cash payments for purchases:
May 31 accounts payable balance ……….………….
$ 90,000
June purchases (40% × 200,000) ………………….
80,000
Total cash payments ……………………………………
$170,000
Phototec, Inc.
Cash Budget
For the Month of June
Cash balance, beginning …………………………..….
$ 8,000
Add receipts from customers (above) ……………..
227,000
Total cash available ……………………………………..
235,000
Less disbursements:
Purchase of inventory (above) …………………….
170,000
Selling and administrative expenses ……………..
51,000
Purchases of equipment …………..………………..
9,000
Total cash disbursements ……………………………..
230,000
Excess of receipts over disbursements …………….
5,000
Financing:
Borrowings—note ……………………………….……
18,000
Repayments—note ……………………………………
(15,000)
Interest ………………………………………………….
(500)
Total financing ……..…………………………………….
2,500
Cash balance, ending …….…………………………….
$ 7,500
