The accountant for Erica\'s Dress Shop prepared the following cash budget. Erica

Question

The accountant for Erica's Dress Shop prepared the following cash budget. Erica's desires to maintain a cash cushion of $22,000 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 2 percent per month. Required a. Complete the cash budget by filling in the missing amounts. (Any repayments should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.) Section 1: Cash receipts Beginning cash balance Add cash receipts 51,500 198,000 218,000 258,600 249,500 Total cash available Section 2: Cash payments For inventory purchases For S&A; expenses For interest expense 74,526 149,230183,152 63,50 69,560 70432 Total budgeted disbursements238,026 Section 3: Financing activities Surplus (shortage) 11,474 10,526 Ending cash balance s 22000 22.000 22,000 b. Determine the amount of net cash fows, from operating activities Erica's will report on the third quarter pro forma statement of cash lows (Enter any cash outflows with a minus sign, Round intermediate calculations and final answer to the nearest whole doilar amount.) 0 Type here to search

Explanation / Answer

Prepare the operating activities section of the statement of cash flows for the year ended November 30, 2017, for Munsun Company, using the indirect method.  

Cash flow from operating activities Net income 1750000 Adjustment to reconcile net income Depreciation expenses 110000 Account receivable decreased 380000 Inventory decreased 300000 Increase prepaid expenses (150000) Decrease account payable (350000) Decrease accured expenses (100000) Net cash flow from operating activities 1940000

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