Chapter 18
Problems 1-18
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
Chapter 18
Question 1
Input Area:
Output Area:
No change N
Chapter 18
Question 2
Input Area:
Output Area:
Chapter 18
Question 3
Input Area:
Output Area:
No change N
Chapter 18
Question 4
Input Area:
Output Area:
No change N
Beginning A/R 310$
Chapter 18
Question 6
Input Area:
Output Area:
Inventory Period 60.4852
Receivable turnover 18.6019
Receivable period 19.6216
Payables turnover 9.3538
Payables period 39.0215
Credit sales 97,381$
COGS 69,382$
Chapter 18
Question 7
Input Area:
Output Area:
Preiods in a year 12.5862
Collection period 29
Chapter 18
Question 8
Input Area:
Q1 Q2 Q3 Q4
Output Area:
Q1 Q2 Q3 Q4
Projected sales increase 15%
Orders (% of sales) 30%
Chapter 18
Question 9
Input Area:
Output Area:
With a payables period of 60 days
Purchases (% of sales) 75%
Payables period 60 days
Expenses (% of sales) 20%
Interest & dividends per Q 90$
Projected sales Q(1) next year 2,150$
Chapter 18
Question 10
Input Area:
Output Area:
Sales budget 195,000$ 215,000$ 238,000$
Credit sales:
In the month of the sale 65%
In the month of after the sale 20%
In the second month after the sale 15%
A/R balance at the end of previous Q 86,000$
December uncollected sales 59,000$
Chapter 18
Question 11
Input Area:
Output Area:
Credit sales 312,000$ 291,200$ 350,400$
Credit purchases 118,240 141,040 166,800
Cash disbursements
Wages, taxes, and expenses 43,040 10,800 62,640
Equipment purchases 74,000 135,000 –
Uncollected credit sales 5%
Collected in the month of the sale 35%
Collected in the following month 60%
Previous month credit sales 196,000$
Previous month credit purchases 134,400$
Beginning cash 112,000$
Chapter 18
Problem 12
Input area:
2010 2011 2010 2011
Output area:
Balance Sheet (in $ thousands)
Cash 30,400$ 29,520$ Accounts payable 44,994$ 47,118$
Accounts receivable 69,904 73,344 Accrued expenses 6,280 5,632
Property, plant, and equipment 147,000 157,180 Common stock 16,000 20,000
Less: Accumulated depreciation 45,730 52,280 Accumulated retained earnings 169,500$ 170,750$
Chapter 18
Question 13
Input Area:
Output Area:
Year end loan value 53,274,354$
Year end cash flow 50,774,354$
Amount you can use 47,500,000$
Line of credit 50,000,000$
Interest rate 0.530%
Compensating balance 5%
Months to repay 6
Chapter 18
Question 14
Input Area:
Output Area:
Line of credit 70,000,000$
Interest rate per quarter 1.900%
Compensating balance 4.00%
Bank pays 1.05%
Months to repay 12
Compounding periods/year 4
Chapter 18
Questions 15, 16
Input Area:
Output Area:
Beginning receivables 68.00$ 80.00$ 87.50$ 95.00$
Collection of accounts 148.00 167.50 182.50 202.50
Ending receivables 80.00$ 87.50$ 95.00$ 107.50$
Payment of accounts 76.05$ 82.80$ 92.25$ 84.60$
Wages, taxes, and other expenses 40.00 43.75 47.50 53.75
Capital expenditures 75.00
Interest & dividends 12.00 12.00 12.00 12.00
Total cash disbursements 128.05$ 213.55$ 151.75$ 150.35$
Total cash collections 148.00$ 167.50$ 182.50$ 202.50$
Total cash disbursements 128.05 213.55 151.75 150.35
Net cash inflow 19.95$ (46.05)$ 30.75$ 52.15$
Beginning cash balance 64.00$ 83.95$ 37.90$ 68.65$
Net cash inflow 19.95 (46.05) 30.75 52.15
Ending cash balance 83.95$ 37.90$ 68.65$ 120.80$
Minimum cash balance (30.00) (30.00) (30.00) (30.00)
Cumulative surplus (deficit) 53.95$ 7.90$ 38.65$ 90.80$
Target cash balance 30.00$ 30.00$ 30.00$ 30.00$
Net cash inflow 19.95 (46.05) 30.75 52.15
New short-term investments (20.63) – (30.94) (52.96)
Income on short-term investments 0.68 1.09 0.19 0.81
Short-term investments sold – 44.96 – –
New short-term borrowing – – – –
Interest on short-term borrowing – – – –
Short-term borrowing repaid – – – –
Ending cash balance 30.00$ 30.00$ 30.00$ 30.00$
Minimum cash balance (30.00) (30.00) (30.00) (30.00)
Cumulative surplus (deficit) –$ –$ –$ –$
Beginning short-term investments 34.00$ 54.63$ 9.67$ 40.62$
Ending short-term investments 54.63$ 9.67$ 40.62$ 93.58$
Beginning short-term debt –$ –$ –$ –$
Ending short-term debt –$ –$ –$ –$
Net cash cost
Cash generated by short-term financing 2.78$
Sales (in millions) 160$ 175$ 190$ 215$
Sales (1st quarter of next year) 170$
Collection period 45
% of purchases for next Q sales 45%
Suppliers paid 36
% of sales for expenses 25%
Interest and dividends 12$
Outlay in second Q 75$
Beginning cash balance 64$
Minimum balance (in millions) 30$
Borrowing rate 3%
Invested securities 2%
Beginning short-term borrowing –$
Chapter 18
Question 17
Input Area:
Output Area:
Line of credit 400,000,000$
% for borrowing 2.10%
Compensating balance 4%
Commitment fee 0.150%
Compounding periods/year 4
Chapter 18
Question 18
Input Area:
Output Area:
Interest payment 2,250,000$
Compensating balance 1,250,000$
Usable funds 21,500,000$
Interest rate 9%
Line of credit 25,000,000$
Compensating balance 5%