Details of this Paper

Felasco Nurseries Inc_Cash Budget

Description

solution

Question

Question;Basic;Cash Budget;P 3.;Felasco Nurseries Inc. has been in business for six years and has four divisions.;Ethan Poulis, the corporation?s controller, has been asked to prepare a cash;budget for the Southern Division for the first quarter. Projected data;supporting this budget follow.;Sales;(60% on credit) Purchases;November;\$160,000;December;\$;86,800;December;200,000;January;124,700;January;120,000;February;99,440;February;160,000;March;104,800;March;140,000;Collection;records of accounts receivable have shown that 30 percent of all credit sales;are collected in the month of sale, 60 percent in the month following the sale;and 8 percent in the second month following the sale, 2 percent of the sales;are uncollectible. All purchases are paid for in the month after the purchase.;Sala?ries and wages are projected to be \$25,200 in January, \$33,200 in;February, and \$21,200 in March. Estimated monthly costs are utilities, \$4,220;collection fees, \$1,700, rent, \$5,300, equipment depreciation, \$5,440;supplies, \$2,480, small tools, \$3,140, and miscellaneous, \$1,900.;Each;of the corporation's divisions maintains a \$6,000 minimum cash bal?ance. As of;December 31, the Southern Division had a cash balance of \$9,600.;Required;1. Prepare a monthly cash budget for Felasco;Nurseries' Southern Divisiontor the first quarter.;2.;Should Felasco Nurseries anticipate taking out a loan for the Southern;Divi?sion during the quarter? If so, how much should it borrow, and when?

Paper#38241 | Written in 18-Jul-2015

Price : \$22