Complete the table for computation of merchandise purchases budget.
Complete the table for computation of merchandise purchases budget.
Part III-Purchases Budget | ||||||||
Complete the table for computation of merchandise purchases budget. | ||||||||
Pfeffer Company | ||||||||
Merchandise Purchases Budgets | ||||||||
For February, March and April | ||||||||
February | March | April | ||||||
Budgeted Ending Inventory | ||||||||
Add budgeted sales | ||||||||
Required units of available merchandise | ||||||||
Deduct beginning inventory | ||||||||
Budgeted purchases (units) | ||||||||
Budgeted cost per unit | ||||||||
Budgeted cost of merchandise purchases | ||||||||
Part IV-Cash Payments Budget | ||||||||
60% of accounts payable are paid in the month of purchase with the remaining 40% | ||||||||
paid the following month. Complete cash payments information. | ||||||||
Cash payments on product purchases (for March and April) | ||||||||
From purchases in | Total | % Paid | March | April | ||||
February | ||||||||
March | ||||||||
April | ||||||||
Total Paid | ||||||||
Part V-Cash Budget | ||||||||
Pfeffer has an outstanding balance on a loan of $120,000 at 10% | ||||||||
annual interest taken last month to meet minimum balance | ||||||||
requirements of $150,000. Loans should be taken out and paid back | ||||||||
based on the ending cash balance each month. Complete the cash | ||||||||
budget for Pfeffer Company for March and April. | ||||||||
Pfeffer Company | ||||||||
Cash Budget | ||||||||
March and April | ||||||||
March | April | |||||||
Beginning cash balance | 45,000.00 | 0.00 | Don’t forget that you must include in this what you collect from A/R | |||||
Cash receipts from customers | but also cash sales for the months (the 3% that are in cash) | |||||||
Total available cash | ||||||||
Cash disbursements | ||||||||
Payments on purchases | ||||||||
Selling and administrative expenses | 160,000.00 | 160,000.00 | ||||||
Interest expense | ||||||||
Total disbursements | ||||||||
Preliminary cash balance | ||||||||
Additional loan | ||||||||
Repayment of loan | ||||||||
Ending cash balance | ||||||||
Ending loan balance | ||||||||
Part VI-Analysis Component | ||||||||
Reviewing the information in the cash budget, what is the value of this information | ||||||||
to Pfeffer Company’s financial manager? What would he use this information for? | ||||||||
Be as specific as possible in your answer. | ||||||||
Please stay in the outlined areas. | ||||||||