Please check out the attachment instructions to finish the questions by using given template
ACCT504_Case_Study_3_Instructions.docx
ACCT504_Case_Study_3_Cash_Budget_Template.xlsx
(Learning Objective 5: Construct anduse a cash budget) Nathan Farmer, chief financial officer of Wang ApplianceStore, is responsible for the company’s budgeting process. Farmer’s staff ispreparing the Wang cash budget for 2014. A key input to the budgeting processis last year’s statement of cash flows, which follows (amounts in thousands):
Wang Appliance Store
Statement of Cash Flows
2013
(inthousands)
Cash Flows from Operating Activities
Collections fromcustomers $51,000
InterestReceived 500
Purchase ofinventory (36,000)
Operatingexpenses (10,200)
Net cash provided by operatingactivities 5,300
Cash Flows from Investing Activities
Purchaseof equipment (3,500)
Purchaseof investments (500)
Saleof investments 1,000
Netcash used for investing activities (3,000 )
Cash Flows from Financing Activities
Paymentof long term debt (400)
Issuanceof Stock 2,000
Paymentof cash dividends (500)
Netcash provided by financing activities 1,000
Cash
Increase (decrease) in Cash 3,300
Cash, beginning of year 2,900
Cash, end of year 5,900
▸Requirements
- 1. Prepare the Wang cash budget for 2014. Date the budgetsimply “2014” and denote the beginning and ending cash balances as“beginning” and “ending.” Assume the company expects 2014 to be the sameas 2013, but with the following changes:
- a. In 2014, the company expects a 20% increase in collectionsfrom customers and a 30% increase in purchases of inventory.
- b. There will be no sales of investments in 2014.
- c. Wang does not plan to issue stock in 2014.
- d. Wang plans to end the year with a cash balance of $5,550.
