TAP & Brothers: Consider the following third-quarter budget data for TAP & Broth

Question

TAP & Brothers: Consider the following third-quarter budget data for TAP & Brothers Third-Quarter Budget Data July August September Credit Sales 258941 265299 284380 Credit Purchases 97804 116018 135024 Wages, Taxes, and Expenses 26612 31353 33454 Interest 7193 7571 8062 Equipment Purchases 54213 61494 0 The company predicts that 4% of its credit sales will never be collected 30% of its sales will be collected in the month of the sale, and the remaining 66% will be collected in the following month. Credit purchases wil be paid in the month following the purchase wi ng month c redit purchases will e padin the month folowing the a in June, credit sales were $138541, and credit purchases were $102763a In June, credit sales were $138541, were $102763 July's beginning cash is 3134593 It TAP maintains a policy of alvrays keeping a minimum cash balance of $75 000 as a buffer against uncertainty and forecasting errors what is the cash surplus deficit at the end of the quarter (ie, end of September)? (Answer surplus as a positive number or deicit as a negative number Round answer to o decima laces Donet round intermediate calculations

Explanation / Answer

Description June July August September Sale revenue       138,541          258,941          265,299          284,380 Cash Receipt from Sale Credit sale collection- same month-30%            77,682            79,590            85,314 Credit sale collection- next month-66%            91,437          170,901          175,097 Monthly sale collection          169,119          250,491          260,411 Purchase during the month       102,763            97,804          116,018          135,024 Accounts payable payment- Next month-100%          102,763            97,804          116,018 Opening cash          184,593          162,931          215,200 Budgeted Receipts          169,119          250,491          260,411 Budgeted Cash payments Accounts payable       (102,763)          (97,804)        (116,018) Wages, taxes and expenses          (26,612)          (31,353)          (33,454) Interest            (7,193)            (7,571)            (8,062) Equipment          (54,213)          (61,494) Loan payment Closing cash balance          162,931          215,200          318,077 Minimum required            75,000 Surplus =318077-75000 Surplus          243,077

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