Gee-See-Que International would like to determine if there would be an excess cash balance at the end of the 2d half of 2021 for their investment in 2022. The beginning cash balance in July will be Php 250,000. They sell 250ml of coconut juice at Php 110 per bottle. The company has a sales forecast for the following month: - July - Php 104,500 August - Php 132,000 September - Php 165,000 October - Php 220,000 November - Php 242,000 December - Php 275,000 The company decided to have an ending inventory of 100 units per month for the entire year of 2021. The sales are expected to be collected 80% for the current month, 15% a month after sales, and the remaining 5% is considered as uncollectible. The production cost of the 250ml coconut juice per unit is Php 60. The purchases made is expected to be paid the following month. Additional Information: Rent expense is Php 15,000 per month. Salaries are Php 50,000 per month; Wages are 15% of monthly sales. The company is expected to purchase an equipment on October amounting to Php 35,000 to be paid the same month. Taxes of Php 25,000 to be paid in December. The principal payment of Php 35,000 will be paid in November, and the interest payment amounting to Php 9,000 will be paid in December. The company would like to maintain and ending balance of Php 200,000 per month. Requirement: 1. Prepare the Cash Budget of Gee-See-Que International for the 2d half of 2021. 2. Based on the Cash Budget, what should Gee-See-Que International do in 2022? Do they need to seek an additional fund or invest their excess fund? Justify your answer.
Gee-See-Que International would like to determine if there would be an excess cash balance at the end of the 2d half of 2021 for their investment in 2022. The beginning cash balance in July will be Php 250,000. They sell 250ml of coconut juice at Php 110 per bottle. The company has a sales forecast for the following month: - July - Php 104,500 August - Php 132,000 September - Php 165,000 October - Php 220,000 November - Php 242,000 December - Php 275,000 The company decided to have an ending inventory of 100 units per month for the entire year of 2021. The sales are expected to be collected 80% for the current month, 15% a month after sales, and the remaining 5% is considered as uncollectible. The production cost of the 250ml coconut juice per unit is Php 60. The purchases made is expected to be paid the following month. Additional Information: Rent expense is Php 15,000 per month. Salaries are Php 50,000 per month; Wages are 15% of monthly sales. The company is expected to purchase an equipment on October amounting to Php 35,000 to be paid the same month. Taxes of Php 25,000 to be paid in December. The principal payment of Php 35,000 will be paid in November, and the interest payment amounting to Php 9,000 will be paid in December. The company would like to maintain and ending balance of Php 200,000 per month. Requirement: 1. Prepare the Cash Budget of Gee-See-Que International for the 2d half of 2021. 2. Based on the Cash Budget, what should Gee-See-Que International do in 2022? Do they need to seek an additional fund or invest their excess fund? Justify your answer.
Chapter6: Managing Cash Flow
Section: Chapter Questions
Problem 2EP
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Transcribed Image Text:Mini Task 2
Cash Budget
Gee-See-Que international would like to determine if there would be an excess cash balance at the end
of the 2 half of 2021 for their investment in 2022. The beginning cash balance in July will be Php
250,000. They sell 250ml of coconut juice at Php 110 per bottle. The company has a sales forecast for
the following month:
July - Php 104,500
August – Php 132,000
September - Php 165,000
October - Php 220,000
November - Php 242,000
December - Php 275,000
The company decided to have an ending inventory of 100 units per month for the entire year of 2021.
The sales are expected to be collected 80% for the current month, 15% a month after sales, and the
remaining 5% is considered as uncollectible. The production cost of the 250ml coconut juice per unit is
Php 60. The purchases made is expected to be paid the following month.
Additional Information:
Rent expense is Php 15,000 per month.
Salaries are Php 50,000 per month; Wages are 15% of monthly sales.
The company is expected to purchase an equipment on October amounting to Php 35,000 to be
paid the same month.
Taxes of Php 25,000 to be paid in December.
The principal payment of Php 35,000 will be paid in November, and the interest payment
amounting to Php 9,000 will be paid in December.
The company would like to maintain and ending balance of Php 200,000 per month.
Requirement:
1. Prepare the Cash Budget of Gee-See-Que International for the 2d half of 2021.
2. Based on the Cash Budget, what should Gee-See-Que International do in 2022? Do they need to
seek an additional fund or invest their excess fund? Justify your answer,
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