Reference no: EM132542607
Question 1: Compute the amount the company needs to finance or the excess cash available for Marsha to invest.
Cash balance, beginning $ 15,000
Collections from customers 145,000
Direct materials purchases 25,000
Expenses :
Operating expenses 50,000
Payroll 75000
Income taxes 6,000
other :
Machinery Purchases 30,000
- Operating expenses include $ 20,000 depreciation for building and equipment. All purchase of materials are paid for in the period of purchase. The company requires a minimum cash balance of $25,000
Question 2: Make Marsha Inc cash Budget for coming year
Marsha Inc.
Cash Budget for Coming Year
Beginning cash balance
Net cash flow from operations:
Cash inflows:
Cash collections from customers
Cash outflows:
Direct materials purchases
Operating expenses
Less:
DepreciationPayrollIncome taxes
Investing activities
Purchase of machinery
Financing activities:
Cash excess (shortage) before financing
Minimum cash balance required
New financing required
Budgeted end-of-period cash balance