I am doing the cash budget, I have finished the cash receipt and cash payment
The questions is

The company makes 25 percent of its sales for cash and 75 percent on credit. Of the credit sales, 30 percent are collected in the month after the sale and 70 percent are collected two months after. X-cell Inc. pays for 20 percent of its purchases in the month after purchase and 80 percent two months after.

Labour expense equals 10 percent of the current month's sales. Overhead expense equals $13,000 per month. Interest payments of $38,000 are due in October and September. Cash dividends of $49,000 are scheduled to be paid in October and November. A tax payment of $15,000 is due in November. There is a scheduled capital outlay of $250,000 in November.

X-cell Inc.'s ending cash balance in August is $52,000. The minimum desired cash balance is $17,000. The maximum desired cash balance is $64,000. Excess cash (above $64,000) is used to buy marketable securities. These securities are sold before borrowing funds in the case of a cash shortfall (less than $17,000).

Now when I go to cash budget

9 10 11 12
cash receipts 287950 370725 340975 294225
cash payment 239,000 327,700 544,600 205,900
net cash flow 48,950 43,025 (203,625) 88,325
beginning cash balance 52000
cumulative cash balance 100,950
monthly borrowing or payment 0
cumulative loan balance
marketable securities purchased 36,950
marketable securites sold 0
cumulative marketable securities
ending cash balance



I have problems when calculate the cumulative loan , can you explain me the cash budget for september?

Quote:

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Originally Posted by hahahk

I am doing the cash budget, I have finished the cash receipt and cash payment
The questions is

The company makes 25 percent of its sales for cash and 75 percent on credit. Of the credit sales, 30 percent are collected in the month after the sale and 70 percent are collected two months after. X-cell Inc. pays for 20 percent of its purchases in the month after purchase and 80 percent two months after.

Labour expense equals 10 percent of the current month's sales. Overhead expense equals $13,000 per month. Interest payments of $38,000 are due in October and September. Cash dividends of $49,000 are scheduled to be paid in October and November. A tax payment of $15,000 is due in November. There is a scheduled capital outlay of $250,000 in November.

X-cell Inc.'s ending cash balance in August is $52,000. The minimum desired cash balance is $17,000. The maximum desired cash balance is $64,000. Excess cash (above $64,000) is used to buy marketable securities. These securities are sold before borrowing funds in the case of a cash shortfall (less than $17,000).

Now when I go to cash budget

9 10 11 12
cash receipts 287950 370725 340975 294225
cash payment 239,000 327,700 544,600 205,900
net cash flow 48,950 43,025 (203,625) 88,325
beginning cash balance 52000
cumulative cash balance 100,950
monthly borrowing or payment 0
cumulative loan balance
marketable securities purchased 36,950
marketable securites sold 0
cumulative marketable securities
ending cash balance



I have problems when calculate the cumulative loan , can you explain me the cash budget for september?

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I don't see any data giving you a cumulative loan balance so you should assume 0 and fill in the rest of the numbers in the table. I expect a cumulative loan balance would arise when the cash flows are sufficiently negative to fully deplete the cash balance and investments as in month 11. The ending cash balance in September should be 64,000 which becomes the beginning cash balance in October, etc, etc