Reference no: EM131095643
Swift Shoes Inc cash budget
The controller of Swift Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:
|
|
April
|
May
|
June
|
|
Sales
|
$100,000
|
$150,000
|
$180,000
|
|
Manufacturing costs
|
40,000
|
50,000
|
54,000
|
|
Selling and administrative expenses
|
32,000
|
38,000
|
45,000
|
|
Capital expenditures
|
-
|
-
|
30,000
|
The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in full in the month following the sale and the remainder the following month. Depreciation, insurance, and property tax expense represent $18,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in July, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.
Current assets as of April 1 include cash of $40,000, marketable securities of $65,000, and accounts receivable of $117,800 ($85,000 from March sales and $32,800 from February sales). Sales on account in February and March were $82,000 and $85,000, respectively. Current liabilities as of April 1 include a $50,000, 12%, 90-day note payable due June 20 and $29,000 of accounts payable incurred in March for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $3,500 in dividends will be received in April. An estimated income tax payment of $34,000 will be made in May. Swift Shoes' regular quarterly dividend of $8,000 is expected to be declared in May and paid in June. Management desires to maintain a minimum cash balance of $35,000.
Instructions
1. Prepare a monthly cash budget and supporting schedules for April, May, and June 2008.
2. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
|
Which of the following securities has lowest interest rate
: Which of the following securities has the lowest interest rate? A bond with default risk will always have a --- risk premium and an increase in its default risk will --- the risk premium
|
|
Low labor costs make competitive outsourcing destination
: Country X is a growing economy located in southeast Asia. Although it has a large population, it also has a disproportionately high number of working age people. A large English-speaking workforce and low labor costs make it a competitive outsourcing..
|
|
Data structures in an oop program
: Suppose you created a video project that has two data structures-an array of strings and a ListView control. You used the Sort() method of the array class to put the film names in ascending order. Then the program populated lstNames with the order..
|
|
Find the abcd constants of a p circuit
: Find the ABCD constants of a π circuit having a 600-Ω resistor for the shunt branch at the sending end, a 1-kΩ resistor for the shunt branch at the receiving end, and an 80-Ω. resistor for the series branch.
|
|
Prepare monthly cash budget and supporting schedules for may
: Prepare a monthly cash budget and supporting schedules for April, May, and June 2008. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
|
|
Cost and revenue curves for perfectly competitive firm
: Figure 1 is the cost and revenue curves for a perfectly competitive firm.
|
|
The theme of romantic relationships in two texts
: Your final paper is designed to help you see connections between the different works we've read this semester. Your assignment is to compare and contrast two works we've studied this semester.
|
|
Affects the short-run aggregate supply curve
: Identify each of the following scenerios affects the short-run aggregate supply curve. (Increase, Decrease, or no change) the US government increases minimum wage. widespread adoption of the Internet by businesses increases productivity and efficienc..
|
|
How do five essential elements of mass trauma intervention
: How do the five essential elements of mass trauma intervention identified by Hobfoll address and treat psychological symptoms of disaster victims? Do you think these elements address the needs of all individuals affected by a disaster? Explain you..
|