Homework SourseUsing the Cash Budget of the ToysRCash Inc store below would
Using the Cash Budget of the ToysRCash Inc store below, would you expect to have a \"clean-up\" period in the credit? If so, when and why?
| 2018 Cash Flow | Total | ||||||||||||
| January | Febuary | March | April | May | June | July | August | September | October | November | December | ||
| COH previous month | $ 147,000.00 | $ 151,500.00 | $ 105,250.00 | $ 79,150.00 | $ 74,449.00 | $ 11,865.94 | $ (25,572.10) | $ (58,106.43) | $ 82,407.18 | $ 100,000.00 | $ 100,000.00 | $ 199,972.06 | |
| added LP | $ 20,850.00 | $ 25,551.00 | $ 88,134.06 | $ 125,572.10 | $ 158,106.43 | $ 17,592.82 | |||||||
| Beging COH | $ 147,000.00 | $ 151,500.00 | $ 105,250.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 199,972.06 | |
| Expected Sales | $ 10,000.00 | $ 11,000.00 | $ 13,000.00 | $ 11,000.00 | $ 250,000.00 | $ 350,000.00 | $ 450,000.00 | $ 500,000.00 | $ 365,000.00 | $ 14,000.00 | $ 13,000.00 | $ 13,000.00 | $ 2,000,000.00 |
| Collections 30 & 90 | $ 30,000.00 | $ 6,500.00 | $ 7,150.00 | $ 8,450.00 | $ 7,150.00 | $ - | $ - | $ 162,500.00 | $ 227,500.00 | $ 292,500.00 | $ 325,000.00 | $ 237,250.00 | |
| Gross profit for month | $ 33,500.00 | $ 10,350.00 | $ 11,700.00 | $ 12,300.00 | $ 94,650.00 | $ 122,500.00 | $ 157,500.00 | $ 337,500.00 | $ 355,250.00 | $ 297,400.00 | $ 329,550.00 | $ 241,800.00 | |
| COGS | $ 3,000.00 | $ 3,300.00 | $ 3,900.00 | $ 3,300.00 | $ 75,000.00 | $ 105,000.00 | $ 135,000.00 | $ 150,000.00 | $ 109,500.00 | $ 4,200.00 | $ 3,900.00 | $ 3,900.00 | $ 600,000.00 |
| Labor | $ 3,000.00 | $ 3,300.00 | $ 3,900.00 | $ 3,300.00 | $ 75,000.00 | $ 105,000.00 | $ 135,000.00 | $ 150,000.00 | $ 109,500.00 | $ 4,200.00 | $ 3,900.00 | $ 3,900.00 | $ 600,000.00 |
| Operating Expenses | $ 20,000.00 | $ 20,000.00 | $ 20,000.00 | $ 20,000.00 | $ 20,000.00 | $ 20,000.00 | $ 20,000.00 | $ 20,000.00 | $ 20,000.00 | $ 20,000.00 | $ 20,000.00 | $ 20,000.00 | $ 240,000.00 |
| Fixed Asset Purchase | $ 30,000.00 | $ 30,000.00 | |||||||||||
| PP | $ 10,000.00 | $ 10,000.00 | $ 10,000.00 | $ 10,000.00 | $ 10,000.00 | $ 10,000.00 | $ 10,000.00 | $ 10,000.00 | $ 10,000.00 | $ 10,000.00 | $ 100,000.00 | ||
| Interest on ST | $ 1,251.00 | $ 2,784.06 | $ 8,072.10 | $ 15,606.43 | $ 25,092.82 | $ 26,148.38 | $ 21,342.29 | $ 7,082.82 | $ 107,379.91 | ||||
| Pay Back on ST | $ 80,101.62 | $ 237,657.71 | $ 118,047.08 | ||||||||||
| Total of Expenses | $ 26,000.00 | $ 56,600.00 | $ 37,800.00 | $ 37,851.00 | $ 182,784.06 | $ 248,072.10 | $ 315,606.43 | $ 355,092.82 | $ 355,250.00 | $ 297,400.00 | $ 162,929.90 | $ 37,800.00 | |
| Before Taxes | $ 7,500.00 | $ (46,250.00) | $ (26,100.00) | $ (25,551.00) | $ (88,134.06) | $ (125,572.10) | $ (158,106.43) | $ (17,592.82) | $ (0.00) | $ 0.00 | $ 166,620.10 | $ 204,000.00 | |
| Tax paid | $ 3,000.00 | $ (0.00) | $ 0.00 | $ 66,648.04 | $ 81,600.00 | ||||||||
| Net Profit | $ 4,500.00 | $ (46,250.00) | $ (26,100.00) | $ (25,551.00) | $ (88,134.06) | $ (125,572.10) | $ (158,106.43) | $ (17,592.82) | $ (0.00) | $ 0.00 | $ 99,972.06 | $ 122,400.00 | |
| Ending Cash | $ 151,500.00 | $ 105,250.00 | $ 79,150.00 | $ 74,449.00 | $ 11,865.94 | $ (25,572.10) | $ (58,106.43) | $ 82,407.18 | $ 100,000.00 | $ 100,000.00 | $ 199,972.06 | $ 322,372.06 | |
| Minimum ending Cash | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | |
| Over/Short | $ 51,500.00 | $ 5,250.00 | $ (20,850.00) | $ (25,551.00) | $ (88,134.06) | $ (125,572.10) | $ (158,106.43) | $ (17,592.82) | $ (0.00) | $ (0.00) | $ 99,972.06 | $ 222,372.06 | |
| Cummulative ST | $ 20,850.00 | $ 46,401.00 | $ 134,535.06 | $ 260,107.16 | $ 418,213.59 | $ 435,806.41 | |||||||
| $ 355,704.79 | $ 118,047.08 |
Solution
Based on the analysis of the Cash Budget given, we expect that there would be a \"clean-up\" period in the credit in two months.
As we can see that ending cash balance in June and July are negative,hence there would be credit clean up in those months.
![Using the Cash Budget of the ToysRCash Inc store below, would you expect to have a \](/WebImages/21/using-the-cash-budget-of-the-toysrcash-inc-store-below-would-1047070-1761544776-0.webp "Using the Cash Budget of the ToysRCash Inc store below, would you expect to have a \")
![Using the Cash Budget of the ToysRCash Inc store below, would you expect to have a \](/WebImages/21/using-the-cash-budget-of-the-toysrcash-inc-store-below-would-1047070-1761544776-1.webp "Using the Cash Budget of the ToysRCash Inc store below, would you expect to have a \")
