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FINAN204-21A Tutorial 10 Week 13

The document provides projections and calculations to prepare a cash budget, income statement, balance sheet, and statement of cash flows for the PDC Company for August 2020. It includes schedules for sales forecasts, cash collections, purchases, disbursements for purchases and wages/commissions, and calculates beginning and ending cash balances to determine any financing needs for the period.

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Danae Yang
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0% found this document useful (0 votes)
77 views

FINAN204-21A Tutorial 10 Week 13

The document provides projections and calculations to prepare a cash budget, income statement, balance sheet, and statement of cash flows for the PDC Company for August 2020. It includes schedules for sales forecasts, cash collections, purchases, disbursements for purchases and wages/commissions, and calculates beginning and ending cash balances to determine any financing needs for the period.

Uploaded by

Danae Yang
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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A.

    Prepare a cash budget for August 2020 for the PDC Company and des

B.    Prepare the PDC Company’s projected income statement for August.

C.    Prepare the PDC Company’s projected balance sheet for August.

D.   Prepare the PDC Company’s projected statement of cash flow for Aug
DC Company and describe how the forecast affects the end-of-month cash balance.

atement for August.

heet for August.

of cash flow for August.


nth cash balance.
PDC Company March April
[Spreadsheet Projections for Instructors]
Schedule 1: Sales Forecast 92,000 115,000
Credit sales, 40% 36,800 46,000
Cash sales, 60% 55,200 69,000

Schedule 2: Cash Collections


Cash sales this month 69,000
100% of last month's credit sales 36,800
Total Collections 105,800

Schedule 3: Purchases
Ending inventory 110,400 149,040
Cost of goods sold 64,400 80,500
Total needed 174,800 229,540
Beginning Inventory 97,520 110,400
Purchases 77,280 119,140

Schedule 4: Disbursements for Purchases


50% of last month's purchases 38,640
50% of this month's purchases 59,570
Disbursements for merchandise 98,210
Schedule 5: Wages and Commissions
Wages, all fixed 5,750 5,750
Commissions (15% of current sales) 13,800 17,250
Total 19,550 23,000

Schedule 6: Disbursements-Wages/Comm
50% of last month's expenses 9,775
50% of this month's expenses 11,500
Total 21,275

Cash Budget April


Beginning cash balance 23,000
Cash receipts 0
Collections from customers 105,800
Total cash available for needs, before fin. 128,800
Cash disbursements: 0
Merchandise 98,210
Wages and commissions 21,275
Miscellaneous expenses 5,750
Rent 4,600
Truck purchase 6,900
Total disbursements 136,735
Minimum cash balance desired 23,000
Total cash needed 159,735
Excess of total cash -30,935
Financing 0
New Borrowing 30,935
Repayments 0
Loan balance 30,935
Interest 0
Total effects of financing 30,935
Cash balance 23,000

Budgeted Income Statements

Sales 92,000 115,000


COGS -64,400 -80,500
Gross Margin 27,600 34,500
Operating Expenses 0 0
Wages and commissions -19,550 -23,000
Rent -4,600 -4,600
Miscellaneous expenses -4,600 -5,750
Insurance -460 -460
Depreciation -1,150 -1,150
Total operating expenses -30,360 -34,960
Income from operations -2,760 -460
Interest expense 0 0
Net income -2,760 -460
Balance Sheets

Current Assets:
Cash 23,000 23,000
Accounts receivable 36,800 46,000
Merchandise inventory 110,400 149,040
Unexpired insurance 4,140 3,680
Total Current Assets 174,340 221,720
Plant
Equipment, fixtures and other 85,100 92,000
Accumulated depreciation -29,440 -30,590
Net PPE 55,660 61,410
Total Assets 230,000 283,130

Current Liabilities
Accounts payable 38,640 59,570
Accrued wages and commissions payable 9,775 11,500
Loan 0 30,935
Total Current Liabilities 48,415 102,005
Owner's equity 181,585 181,125
Total equities 230,000 283,130
Accounting Statement of Cash Flows

Cash Flows From Activities


Net Income -460
Adjustments to Net Inc for CF
Depreciation Expense 1,150
Decrease in Prepaids 460
Increase in Accrued Liab. 1,725
Decrease in Inventory -38,640
Decrease in A/P 20,930
Increase in A/R -9,200
Decrease in Def. Inc. Tax 0
Total Adjustments -23,575

Net Cash Flow From Opps (Acct.) -24,035

Cash Flows From Investing


Capex -6,900
Net Cash Used by Ops/Investments -30,935

Cash Flows from Financing


Equity Issues 0
Dividends 0
Debt Issues 30,935
Net Cash Flows from Financing 30,935
Net Decrease in Cash and Cash Equiv. 0
Beginning Cash Balance 23,000
Ending Cash Balance 23,000
May June July Aug. Sept.

184,000 138,000 115,000 92,000


73,600 55,200 46,000
110,400 82,800 69,000

110,400 82,800 69,000


46,000 73,600 55,200
156,400 156,400 124,200

123,280 110,400 97,520


128,800 96,600 80,500
252,080 207,000 178,020
149,040 123,280 110,400
103,040 83,720 67,620

59,570 51,520 41,860


51,520 41,860 33,810
111,090 93,380 75,670
5,750 5,750 5,750
27,600 20,700 17,250
33,350 26,450 23,000

11,500 16,675 13,225


16,675 13,225 11,500
28,175 29,900 24,725

May June July


23,000 23,000 23,000
0 0 0
156,400 156,400 124,200
179,400 179,400 147,200
0 0 0
111,090 93,380 75,670
28,175 29,900 24,725
9,200 6,900 5,750
4,600 4,600 4,600
0 0 0
153,065 134,780 110,745
23,000 23,000 23,000
176,065 157,780 133,745
3,335 21,620 13,455
0 0 0
0 0 0
2,871 21,199 6,865
28,064 6,865 0
464 421 103
-3,335 -21,620 -6,968
23,000 23,000 29,487

184,000 138,000 115,000


-128,800 -96,600 -80,500
55,200 41,400 34,500
0 0 0
-33,350 -26,450 -23,000
-4,600 -4,600 -4,600
-9,200 -6,900 -5,750
-460 -460 -460
-1,150 -1,150 -1,150
-48,760 -39,560 -34,960
6,440 1,840 -460
-464 -421 -103
5,976 1,419 -563
23,000 23,000 29,487
73,600 55,200 46,000
123,280 110,400 97,520
3,220 2,760 2,300
223,100 191,360 175,307

92,000 92,000 92,000


-31,740 -32,890 -34,040
60,260 59,110 57,960
283,360 250,470 233,267

51,520 41,860 33,810


16,675 13,225 11,500
28,064 6,865 0
96,259 61,950 45,310
187,101 188,520 187,957
283,360 250,470 233,267
5,976 1,419 -563

1,150 1,150 1,150


460 460 460
5,175 -3,450 -1,725
25,760 12,880 12,880
-8,050 -9,660 -8,050
-27,600 18,400 9,200
0 0 0
-3,105 19,780 13,915

2,871 21,199 13,352

0 0 0
2,871 21,199 13,352

0 0 0
0 0 0
-2,871 -21,199 -6,865
-2,871 -21,199 -6,865
0 0 6,487
23,000 23,000 23,000
23,000 23,000 29,487
S
Cash Budgeting Exercise

PDC Company
[Spreadsheet Projections for Instructors]
Schedule 1: Sales Forecast
Credit sales, 40%
Cash sales, 60%

Schedule 2: Cash Collections


Cash sales this month
100% of last month's credit sales
Total Collections

Schedule 3: Purchases
Ending inventory
Cost of goods sold
Total needed
Beginning Inventory
Purchases
Cash Budgeting Exercise

Schedule 4: Disbursements for Purchases


50% of last month's purchases
50% of this month's purchases
Disbursements for merchandise

Schedule 5: Wages and Commissions


Wages, all fixed
Commissions (15% of current sales)
Total

Schedule 6: Disbursements-Wages/Comm
50% of last month's expenses
50% of this month's expenses
Total
Cash Budgeting Exercise

Cash Budget
Beginning cash balance
Cash receipts
Collections from customers
Total cash available for needs, before fin.
Cash disbursements:
Merchandise
Wages and commissions
Miscellaneous expenses
Rent
Truck purchase
Total disbursements
Minimum cash balance desired
Total cash needed
Excess of total cash
Financing
New Borrowing
Repayments
Loan balance
Cash Budgeting Exercise

Interest
Total effects of financing
Cash balance

Budgeted Income Statements

Sales
COGS
Gross Margin
Operating Expenses
Wages and commissions
Rent
Miscellaneous expenses
Insurance
Depreciation
Total operating expenses
Income from operations
Interest expense
Net income
Cash Budgeting Exercise

Balance Sheets

Current Assets:
Cash
Accounts receivable
Merchandise inventory
Unexpired insurance
Total Current Assets
Plant
Equipment, fixtures and other
Accumulated depreciation
Net PPE
Total Assets
Cash Budgeting Exercise

Current Liabilities
Accounts payable
Accrued wages and commissions payable
Loan
Total Current Liabilities
Cash Budgeting Exercise

Owner's equity
Total equities

Accounting Statement of Cash Flows

Cash Flows From Activities


Net Income
Adjustments to Net Inc for CF
Depreciation Expense
Decrease in Prepaids
Increase in Accrued Liab.
Decrease in Inventory
Decrease in A/P
Increase in A/R
Decrease in Def. Inc. Tax
Total Adjustments

Net Cash Flow From Opps (Acct.)

Cash Flows From Investing


Capex
Net Cash Used by Ops/Investments

Cash Flows from Financing


Cash Budgeting Exercise

Equity Issues
Dividends
Debt Issues
Net Cash Flows from Financing

Net Decrease in Cash and Cash Equiv.


Beginning Cash Balance
Ending Cash Balance

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