The accountant for Adams’s Dress Shop prepared the following cash budget. Adams’
ID: 2538839 • Letter: T
Question
The accountant for Adams’s Dress Shop prepared the following cash budget. Adams’s desires to maintain a cash cushion of $15,000 at the end of each month. Funds are assumed to be borrowed and repaid on the last day of each month. Interest is charged at the rate of 3 percent per month.
Required
Complete the cash budget by filling in the missing amounts.
Determine the amount of net cash flows from operating activities Adams’s will report on the third quarter pro forma statement of cash flows.
Determine the amount of net cash flows from financing activities Adams’s will report on the third quarter pro forma statement of cash flows.
Complete this question by entering your answers in the tabs below.
Complete the cash budget by filling in the missing amounts. (Any shortages or repayments should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.)
Determine the amount of net cash flows from both operating and financing activities Adams's will report on the third quarter pro forma statement of cash flows. (Round intermediate calculations and final answers to the nearest whole dollar amount.)
Explanation / Answer
Req A: Cash Budget JULY AUG SEP Section-1 Cash receipts Beginning Cash balance 43000 15000 15000 Add: Cash receipts 181000 201000 241600 Total cash available 224000 216000 256600 Section-2 Cash payments For inventory purchases 166026 140730 174652 For S& A expense 55000 61060 61932 For interest expense 0 361 395 Total budget Disbursement 221026 202151 236979 Section-3 Financing Activities Surplus/(Shortage) 2974 13849 19621 Borrowing/(repayment) 12026 1151 -4621 Ending cash balance 15000 15000 15000 Req B: Cashflows from Operating Activities: Total cash receipts from revenue (181000+201000+241600) 623600 Payment of inventory (166026+140730+174652) -481408 Payment of Sselling andn Admin expense -177992 Net cash used in operating activities -35800 Req C: Cash flows from Investing Activities: Interest paid (361+1226) -756 Borrowing from bank (12026+28849) 13177 Repayment of bank loan -4621 Net Cash provided from Investing Activities 7800
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