Business, 28.08.2020 23:01, jackfrost5

Using the information provided, construct a monthly cash budget for October through December 2014. Based on your analysis, will Noble enjoy a surfeit of cash, or require external financing? Sales (20 percent for cash, the rest on 30-day credit terms):
2014 Actual 2014 Projected
July August September October November
76,000 88,000 266,000 125,000 51,000
Purchases (all on 60-day terms):
2014 Actual 2014 Projected
July August September October November
116,000 122,000 257,000 62,000 27,000
Salaries payable monthly 20,000
Principal payment on debt due in December 25,700
Interest due in December 9,000
Dividend payable in December 15,000
Taxes payable in November 19,000
Addition to accumulated depreciation in December4,000
Cash balance on October 1, 2014 34,000
Minimum desired cash balance 15,000

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answered: makaleyf19

Noble

Monthly Cash Budget for the months of October through December 2014:

October November December

Cash balance on October 1, 2014 $34,000 $129,800 ($56,000)

Total cash received 237,800 110,200 40,800

Total cash available $271,800 $240,000 ($15,200)

Cash payments:

Cash payment for purchases 122,000 257,000 62,000

Salaries 20,000 20,000 20,000

Principal payment 25,700

Interest 9,000

Dividend 15,000

Taxes 19,000

Total cash payments $142,000 $296,000 $131,700

Cash Balance $129,800 ($56,000) ($146,900)

Minimum desired cash balance 15,000

Explanation:

a) Data and Calculations:

1. Sales:

Cash Sales = 20% of Sales

Sales on account = 80%

Credit terms = n/30

2014 Actual 2014 Projected

July August September October November Dec.

Sales: 76,000 88,000 266,000 125,000 51,000

Cash Sales 53,200 25,000 10,200

Cash received on account 212,800 100,000 40,800

Total cash received $237,800 $110,200 $40,800

2. Purchases (all on 60-day terms):

2014 Actual 2014 Projected

July August September October November Dec.

Purchases 116,000 122,000 257,000 62,000 27,000

Cash payment 116,000 122,000 257,000 62,000

3. Other information:

Salaries payable monthly 20,000

Principal payment on debt due in December 25,700

Interest due in December 9,000

Dividend payable in December 15,000

Taxes payable in November 19,000

Addition to accumulated depreciation in December 4,000

Cash balance on October 1, 2014 34,000

Minimum desired cash balance 15,000

b) Noble will enjoy cash surfeit in October only. In November and December, it will be in some serious deficits that require external financing to keep the business afloat. If cash requirement through some external financing is not satisfied in November and December, Noble will not be able to meet with its maturing debt obligations.

answered: Guest

answer; ///blank(1) longer; blank(2); lessi believe this is correct, plz check first; good luck';

answered: Guest

Having a long credit that will be corrected is better that a short credit that is clear is simply because with long credit history, a prospective lender can see how you have operated your credit facility over a considerable period. nobody's credit history is perfect - everyone has at least 1 or 2 lapses on their record. have short history of your credit doesn't show patterns or trends of persistent late payments.

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Using the information provided, construct a monthly cash budget for October through December 2014. B...