Assignment 1: LASA 2—Cash Management and Budgeting
Click below link for Answer http://workbank247.com/q/assignment-1-lasa-2cash-management-and-budgeting/4017 Assignment 1: LASA 2—Cash Management and Budgeting
The new owner of Bob’s Boats, Bob, just purchased the business and discovered that the prior owner did not have a plan for managing the current assets of the company. Bob has decided that the place to start is with a cash budget, using the template he used in his prior position.
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Bob has requested that you to complete the cash budget given the data that he has already retrieved from the company’s records and from his own analysis.
Table-1:
Sales Forecast for the next 9 Months | Month | Sales | | January | $ 162,000.00 | | February | $ 168,000.00 | | March | $ 324,000.00 | | April | $ 485,000.00 | | May | $ 648,000.00 | | June | $ 325,000.00 | | July | $ 325,000.00 | | August | $ 80,000.00 | | September | $ 162,000.00 | |
Collections on receivables have historically been collected as follows and this pattern is expected to continue: * 12% in the Month of Sale * 60% in the month following the Sale * 28% in the Second Month after the Sale
Bob pays for the labor and materials in the month after they are incurred. Bob has also compiled the following information on expenses for the upcoming nine month period:
Table-2:
Month | Labor and Materials Expense | Administrative Salaries | Depreciation Charges | Income Taxes | Lease Payments | Miscellaneous Expenses | January | $ 80,000.00 | $ 25,000.00 | $ 34,500.00 | - | $ 8,500.00 | $ 3,000.00 | February | $ 80,000.00 | $ 25,000.00 | $ 34,500.00 | - | $ 8,500.00 | $ 3,000.00 | March | $ 114,000.00 | $