Construct cash budget for third month of the second quarter

Assignment Help Financial Accounting
Reference no: EM132928875

Ace Corp. has sales for the second quarter of $2M, $3M and $5m per month.  All sales are on credit terms 2/10 net 40. Only a small proportion of customers (10%) pay early enough to earn the 2% discount. Most customers (70%) pay in the month following purchase, with the remaining 20% paying in the second month following purchase. It obtains 30 days credit from its suppliers, and purchases usually amount to 70 % of the current month's sales. Taxes ($0.75M) must be paid in the third month of the quarter. Other expenses are (i) wages @ 15% of current month's sales (ii) interest on debt ($0.5M), and "other expenses" @ 10% of current month's sales.

Problem 1: Construct a cash budget for third month of the second quarter.

Problem 2: Does the firm have a cash surplus or deficit?

Reference no: EM132928875

Questions Cloud

What is the annualized percentage of forward premium : The 125-day forward rate for the euro is $1.13, while the current spot rate for the euro is $1.14. What is the annualized percentage (%) of forward premium
What are the characteristics of hr people : What are the characteristics of HR people that make them effective in their jobs?
What is the eoq for haulsee : Ordering costs are $540, and Haulsee's inventory carrying costs average 14% of the inventory value. What is the EOQ for Haulsee?
Evaluate the fairness and transparency of the process : 1. Thinking about your current job, what sources of power do you have at your disposal?
Construct cash budget for third month of the second quarter : Ace Corp. has sales for the second quarter of $2M, $3M and $5m per month. Construct a cash budget for third month of the second quarter.
What is futon abnormal rate of return : A month later, the market is up by 6.7%, and United Futon is up by 7.7%. What is Futon's abnormal rate of return
What marigold net cash provided by operating activities : What Marigold's net cash provided by operating activities for 2021 was? Marigold Corp. had net income for 2021 of $3000000. Depreciation of plant assets $120700
Design a learning environment : What strategic value do training and development have in an organization?
At which amount allowance for doubtful accounts receivable : At which amount will the allowance for doubtful accounts receivable be reported on the balance sheet if the net account receivable balance is $35,000

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd