ppt课件-chapter9budgeting-baruchcollege.pptVIP

CASH BUDGET – EXPECTED CASH OUTFLOWS TO AND INFLOWS FROM OPERATIONS AND FINANCING FOSTER COMPANY – CASH BUDGET The Foster Company has provided the following information for preparing a cash budget: Expected cash balance on 1/1/2007 = $40,000 (1) Information on cash receipts: 80% of all sales are on credit. 70% of credit sales are collected in the quarter in which the sale is made and 30% are collected in the following quarter. A/R is estimated to be $60,000 on 12/31/2006; the company expects to collect the outstanding A/R in the 1st quarter of 2007. In the 1st quarter of 2007, Foster expects to sell marketable securities that are valued at $10,000. (2) Information on cash disbursements: Direct materials are all purchased on credit. Foster usually pays 60% of its purchases in the same quarter as the purchase and the rest is paid in the following quarter. The company expects to have an accounts payable balance of $40,000 on December 31, 2006; and all outstanding payables are expected to be paid in the first quarter of 2007. All employees – direct laborers, supervisors, SA staff – are all paid in the quarter in which their services are used. Overhead costs and SA expenses are paid in the quarter in which they are incurred On April 1, 2007, the company plans to spend $90,000 to buy a high-end knitting machine, which has a 10-year useful life. (3) Information on financing: The company expects to obtain a loan for the full amount of the knitting machine on April 1, 2007. No principal will be repaid during the year; interest at an annual rate of 10% is due quarterly. The company does not expect to issue stock or pay any dividends in 2007. (4) FOSTER COMPANY – CASH BUDGET FOSTER COMPANY – CASH BUDGET FOSTER COMPANY – BUDGETED INCOME STATEMENT BUDGETED INCOME STATEMENT – projection of net income the company expects to earn as a result of all the budgeted activities FOSTER COMPANY – BUDGET BALANCE SHEET FOSTER COMPANY – BUDGET BALANCE SHEET FOSTER COMPANY – BUDGET BALANC