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Question(s) / Instruction(s):

The president of Univax, Inc. has just approached the company’s bank seeking short-term financing for the coming year, Year 2. Univax is a distributor of commercial vacuum cleaners. The bank has stated that the loan request must be accompanied by a detailed cash budget that shows the quarters in which financing will be needed, as well as the amounts that will be needed and the quarters in which repayments can be made.

 

 

 

 

 

 

Required:

1)

a.            Prepare a schedule of expected cash collections on sales by quarter and in total for Year 2.

b.            Prepare a schedule of expected cash disbursements for merchandise purchases, by quarter and in total for Year 2.

2.            Compute the expected cash disbursements for selling and administrative expenses, by quarter and in total, for Year 2.

3.            Prepare a cash budget by quarter and in total for Year 2. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign.

 

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