This business/management problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Here is the complete cash budget in columnar form. Tanya Limited Cash Budget For the Three Months Ending 31 October | | August | September | October | | :---------------------------------- | :--------- | :------------ | :---------- | | Cash Receipts | | | | | Sales Revenue | 92,000 | 96,000 | 104,800 | | Total Cash Receipts | 92,000 | 96,000 | 104,800 | | | | | | | Cash Disbursements | | | | | Raw Materials | 46,000 | 48,000 | 52,400 | | Direct Labor | 23,000 | 24,000 | 26,200 | | Manufacturing Overhead | 11,500 | 12,000 | 13,100 | | Selling & Administrative Expenses | 18,400 | 19,200 | 20,960 | | Purchase of Equipment | 0 | 0 | 10,000 | | Loan Repayment | 5,000 | 5,000 | 5,000 | | Total Cash Disbursements | 103,900| 108,200 | 127,660 | | | | | | | Net Cash Flow | (11,900)| (12,200) | (22,860)| | | | | | | Beginning Cash Balance | 30,000 | 18,100 | 5,900 | | Ending Cash Balance | 18,100 | 5,900 | (16,960)| | Minimum Required Balance | 15,000 | 15,000 | 15,000 | | Excess (Deficiency) of Cash | 3,100 | (9,100) | (31,960) | | | | | | | Financing | | | | | Borrowings | 0 | 10,000 | 35,000 | | Repayments | 0 | 0 | 0 | | Total Financing | 0 | 10,000 | 35,000 | | | | | | | Ending Cash Balance (after financing) | 18,100 | 15,900 | 18,040 | Explanation of Calculations: Sales Revenue: August: 1,150 units × \80/unit = \92,000 September: 1,200 units × \80/unit = \96,000 October: 1,310 units × \80/unit = \104,800 Raw Materials: August: 1,150 units × \40/unit = \46,000 September: 1,200 units × \40/unit = \48,000 October: 1,310 units × \40/unit = \52,400 Direct Labor: August: 1,150 units × \20/unit = \23,000 September: 1,200 units × \20/unit = \24,000 October: 1,310 units × \20/unit = \26,200 Manufacturing Overhead: (50% of Direct Labor) August: 0.50 × \23,000 = \11,500 September: 0.50 × \24,000 = \12,000 October: 0.50 × \26,200 = \13,100 Selling & Administrative Expenses: (20% of Sales Revenue) August: 0.20 × \92,000 = \18,400 September: 0.20 × \96,000 = \19,200 October: 0.20 × \104,800 = \20,960 Beginning Cash Balance: August: 30,000 (Given) September: 18,100 (Ending balance from August) October: 5,900 (Ending balance from September) Ending Cash Balance: Beginning Cash Balance + Total Cash Receipts - Total Cash Disbursements Excess (Deficiency) of Cash: Ending Cash Balance - Minimum Required Balance Borrowings: August: 0 (Excess cash is positive) September: 10,000 (To meet the minimum required balance of 15,000, as the deficiency is 9,100) October: 35,000 (To meet the minimum required balance of 15,000, as the deficiency is 31,960) Ending Cash Balance (after financing): Ending Cash Balance + Borrowings That's 2 down. 3 left today — send the next one.