1) What are the three sections of a Cash Budget, and what is included in each section? The three sections of a Cash Budget are; Cash receipts, Cash disbursements, and Financing. A cash budget allows you to estimate and track all of the money that comes into and leaves your business. Cash Receipts are any monies your business takes in, such as sales receipts. Cash disbursements show where you must spend some of your money, such as on employee pay, raw materials purchases, and manufacturing overhead costs Financing shows expected payments and the repayments of the borrowed funds plus interest.
This week we learned that companies are required to prepare a statement of cash flows because it gives a more accurate snapshot of the actual cash flow of a company. Financial statements give an overall picture of how much revenue a company is reporting, but high revenue does not guarantee that the company has the ability to pay its bills. The statement of cash flows is a tool designed to help external users make sound economic decisions about the company. The statement of cash flows is divided into three sections: 1) operating activities, 2) investing activities, and financing activities. The operating activities section analyzes the company's flow of cash as it relates to a net loss or net income.
Calculate the amount of employee taxes withheld and prepare the company's journal entry to accrue the January salaries expense and withholding of January taxes. Answer: Salaries Expense | 8,000 | | FICA–Social Security Taxes Payable ($8,000 x .062) | | 496 | FICA–Medicare Taxes Payable ($8,000 x .0145) | | 116 | Employees' Federal Income Taxes Payable ($8,000 x .15) | | 1,200 | Accrued Payroll Payable | | 6,188 | 11. On December 1, 2007 Gates Company borrowed $45,000 cash from FirstBank on a 90-day, 9% note payable. a. Prepare Gate's general journal entry to record the issuance of the note payable.
For auditing year-end cash will utilized objectives in order to (1) find the internal controls related to each audit objective; (2) designing tests of controls related to the support of a reduced control risk, and (3) substantive tests of transactions design that tests each objective for monetary misstatements. In the audit the tests of controls for the cash cycle will involve observing if the Apollo Shoes accountant reconciled the bank account; observing cash receipts; examining files; verifying monthly statements; examining evidence related to internal verification, and observe cash that has not been recorded during a specific period. Substantive transaction tests involves reviewing cash receipts; duplicate deposit slips; preparing proof of cash receipts; using audit software to trace sales journal totals to the general ledger; and comparing deposit dates from the bank statements (Arens, Elder & Beasley, 2012). And because cash balances is affected by the other cycles except inventory and warehousing cycle the controls over cash receipts in the audit of cash transaction are thoroughly audited. The year-end bank reconciliations are usually extensive audit and using analytical procedures are test for reasonableness of cash balances.
Liabilities are accounts that are owed out to a creditor, vendor or a bank. Liabilities are presented on the Balance Sheet and normally have a credit (negative) balance. A debit to a liability account decreases it while a credit will increase it. Liabilities are broken down to current and long term. The current liabilities are what is owed and is expected to be paid off on one year.
The SEC requires all of the following for revenue to be recognized except A. Cash is collected. B. Persuasive evidence of an arrangement exists. C. Delivery has occurred or services have been rendered.
3.1.10 Cash Budget The cash budget is “an estimation of the cash inflows and outflows for a business for a specific period of time. Cash budget are used to assess whether the entity has sufficient cash to fulfil regular operations and whether too much cash is being left in unproductive capacities”. (Reference 2) The cash budget is prepared in advance for the first 6 months, and a cash deficit of £20,364 and £2,228 were incurred in January and February. A second-hand bottling plant was purchased in January which cost £420,000. The business required £30,000 cash for working capital.
• begins when the firm uses its cash to purchase raw materials and ends when the firm collects cash payments on its credit sales. • shows how long the firm keeps its inventory before selling it. Click here to download STR 581 Week 4 Capstone 2 19. Ajax Corp. is expecting the following cash flows - $79,000, $112,000, $164,000, $84,000, and $242,000 – over the next five years. If the company’s opportunity cost is 15 percent, what is the present value of these cash flows?
When a net operating loss is carried back to a non-loss year, the net operating loss is a miscellaneous itemized deduction. ANS: F An NOL is a business loss. Therefore, the deduction is a deduction for AGI. PTS: 1 REF: p. 7-23 MULTIPLE CHOICE 1. Mable is in the business of factoring accounts receivable.
| Cash flow and a source of value | This term is described of the flow of cash coming in and out. | Titman, S., Keown, A. J., & Martin, J. D. (2014). Financial Management, Principles and Applications (12 ed.). : Pearson EDU. | Project management | Project management is the organization of pace of a job and improvement of process.