Skip to content

Dorothy Koehl recently leased space in the Southside Mall an

Do you have a similar question? Our professional writers have done a similar paper in past. Give Us your instructions and wait for a professional assignment!        

Dorothy Koehl recently leased space in the Southside Mall and openeda new business, Koehl’s Doll Shop. Business has been good, but Koehl frequently runs out of cash. This has necessitated late payment on certain orders, which is beginning to cause a problem with suppliers. Koehl plans to borrow from the bank to have cash ready as needed, but first she needs a forecast of how much she should borrow. Accordingly, she has asked you to prepare a cash budget for the critical period around Christmas, when needs will be especially high.Sales are made on a cash basis only. Koehl’s purchases must be paid for during the following month. Koehl pays herself a salary of $4,200 per month, and the rent is $2,800 per month. In addition, she must make a tax payment of $11,000 in December. The current cash on hand (on December 1) is $350, but Koehl has agreed to maintain an average bank balance of $5,500 – this is her target cash balance. (Disregard the amount in the cash register, which is insignificant because Koehl keeps only a small amount on hand in order to lessen the chances of robbery.)The estimated sales and purchases for December, January, and February are shown below. Purchases during November amounted to $140,000. Sales PurchasesDecember $120,000 $35,000 January $36,000 $35,000 February$ $58,000 $35,000Prepare a cash budget for December, January, and February. Do not round intermediate calculations. Round your answers to the nearest dollar. Negative values, if any, should be indicated by a minus sign. Collections and Purchases: December January FebruarySales (Collections) ?$120,000 $36,000 $58,000Purchases $35,000 $35,000 $35,000Payments for purchases $140,000 $35,000 $35,000 Salaries $4,200 $4,200 $4,200Rent ? $2,800 $2,800 $2,800Taxes? $11,000?—- —–Total payments $158,000 $42,000 $2,800Cash at start of forecast ? $350 —– ——Net cash flow ? -$38,000-$6,000 -$16,000Cumulative cash balance-$37,650 _________ __________Target cash balance $5,500 $5.500 $5,500 Surplus cash or loans needed -$43,150? __________ __________ *** ONLY NEED THE BOLD QUESTIONS- CUMULATIVE CASH BALANCE AND SURPLUS CASH LOANS NEEDED- FOR JANUARY AND FEBRUARY***Thank you in advance :)AccountingBusinessFinancial AccountingFIN 510

Get a plagiarism-free order today   we guarantee confidentiality and a professional paper and we will meet the deadline.    

Leave a Reply

Order a plagiarism free paper today. Get 20% off your first order!

X