Question

Piano Man, Inc., has a 40-day average collection period and wants to maintain a minimum cash balance of $30 million, which is what the company currently has on hand. The company currently has a receivables balance of $194 million and has developed the following sales and cash disbursement budgets in millions: Q1 02 3 Q4 $423 S495 $576 $540 322 440 686 445 Sales Total cash disbursement Complete the following cash budget for the company. (A negative answer should be indicated by a minus sign. Enter your answers in millions of dollars, e.g., 32. Do not round intermediate calculations and round your answers to the nearest whole million dollar amount, e.g., 32.) PIANO MAN, INC. Cash Budget (in milions) 01 02 Q3 Q4 Sales Cash collections Ending receivables 495 576 540 Total cash collections Total cash disbursements Net cash inflow 322 440 686 445 Beginning cash balance Net cash inflow Ending cash balance Minimum cash balance Cumulative surplus (deficit)

Answer 1

PIANO MAN, INC. Cash Budget in millions Q1 Q2 Q3Q4 Beginning receivables Sales Cash collections Ending receivables 194 188 220 256 423 495 576 540 429 463 540 556 188 220 256 240 * *Beg. Receivable(current Quarter sales 50/90) Total cash collections Total cash disbursements Net cash inflow 429 463540 556 322 440686 445 107 23-146 111 30 137 160 14 107 23-146 111 137 160 14 125 30 -303030 Cumulative surplus (deficit)107130-1695 Beginning cash balance Net cash inflow Ending cash balance Minimum cash balance 19:15 ENG US 05/05/2019