| Part III-Purchases Budget |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Complete the table for computation of merchandise purchases budget. |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Pfeffer Company |
|
|
|
|
| Merchandise Purchases Budgets |
|
|
|
|
| For February, March and April |
|
|
|
|
| February |
March |
April |
|
|
|
|
| |
|
|
| Budgeted Ending Inventory |
|
|
|
|
| Add budgeted sales |
|
|
|
|
| Required units of available merchandise |
|
|
|
|
| Deduct beginning inventory |
|
|
|
|
| Budgeted purchases (units) |
|
|
|
|
| Budgeted cost per unit |
|
|
|
|
| Budgeted cost of merchandise purchases |
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Part IV-Cash Payments Budget |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| 60% of accounts payable are paid in the month of purchase with the remaining 40% |
|
|
|
|
| paid the following month. Complete cash payments information. |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Cash payments on product purchases (for March and April) |
|
|
|
|
| From purchases in |
Total |
% Paid |
March |
April |
|
|
|
|
| February |
|
|
|
|
| March |
|
|
|
|
| |
|
|
|
| April |
|
|
|
|
| Total Paid |
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Part V-Cash Budget |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Pfeffer has an outstanding balance on a loan of $120,000 at 10% |
|
|
|
|
|
| annual interest taken last month to meet minimum balance |
|
|
|
|
|
| requirements of $150,000. Loans should be taken out and paid back |
|
|
|
|
|
| based on the ending cash balance each month. Complete the cash |
|
|
|
|
|
| budget for Pfeffer Company for March and April. |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Pfeffer Company |
|
|
|
|
|
| Cash Budget |
|
|
|
|
|
| March and April |
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
March |
April |
|
|
|
|
|
| Beginning cash balance |
45,000.00 |
0.00 |
Don’t forget that you must include in this what you collect from A/R |
| Cash receipts from customers |
but also cash sales for the months (the 3% that are in cash) |
| Total available cash |
| Cash disbursements |
|
|
|
|
|
| Payments on purchases |
|
|
|
|
|
| Selling and administrative expenses |
160,000.00 |
160,000.00 |
|
|
|
|
|
| Interest expense |
|
|
|
|
|
| Total disbursements |
|
|
|
|
|
| |
|
|
|
|
| Preliminary cash balance |
|
|
|
|
|
| Additional loan |
|
|
|
|
|
| Repayment of loan |
|
|
|
|
|
| |
|
|
|
|
| Ending cash balance |
|
|
|
|
|
| Ending loan balance |
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Part VI-Analysis Component |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Reviewing the information in the cash budget, what is the value of this information |
|
|
|
|
| to Pfeffer Company’s financial manager? What would he use this information for? |
|
|
|
|
| Be as specific as possible in your answer. |
|
|
|
|
|
|
|
| Please stay in the outlined areas. |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
Leave a Reply
Want to join the discussion?Feel free to contribute!