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# PP #6. The Sharpe Corporations projected sales for the

### Resolved Question:

PP #6.

The Sharpe Corporation’s projected sales for the first eight months of 2011 are as follows:

January 90,300
February 120,300
March 134,300
April 240,900
May 300,600
June 270,900
July 224,200
August 150,600

Of Sharpe’s sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$219,900 (Nov) and \$176,000 (Dec) respectively. Sharpe purchases it’s raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays\$10,600 per month for rent and \$19,300 each month for other expenditures. Tax prepayments of \$22,300 are made each quarter, beginning in March. The company’s cash balance at December 31, 2010 was \$32,300; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (11%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$60,190 these funds would be borrowed at the beginning of April with interest of \$552 (i.e. 11%*1/12*\$60,190) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Shapre covering the first seven months of 2011.
Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________
Cash Receipts________
Sales for Cash (10%)________
First month after sales (60%)________
Second month after sales (30%)________
Total Cash Receipts________
Cash disbursements________
Raw materials________
Rent________
Other Expenditures________
Tax prepayments________
Total Cash Disbursement________
Net Change in Cash________
Net change in cash for period ________
(+) Beginning cash balance________
(-) Interest on short-term borrowing________
(-) Short-term borrowing repayments________
(=) Ending cash balance b/borrowing ________ (December= 21300)
New Financing Needed________
Financing needed for period________
Ending cash balance________
Cumulative borrowing________

B.) Sharpe has \$199,400 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________

PP #7.

The Sharpe Corporation’s projected sales for the first eight months of 2011 are as follows:

January 90000
February 120000
March 135000
April 240000
May 300000
June 270000
July 225000
August 150000

Of Sharpe’s sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$220,000 (Nov) and \$175,000 (Dec) respectively. Sharpe purchases it’s raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays\$10,000 per month for rent and \$20,000 each month for other expenditures. Tax prepayments of \$22,500 are made each quarter, beginning in March. The company’s cash balance at December 31, 2010 was \$22,000; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (12%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$60,500 these funds would be borrowed at the beginning of April with interest of \$605 (i.e. 12%*1/12 *\$60,500) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Shapre covering the first seven months of 2011.
Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________
Cash Receipts________
Sales for Cash (10%)________
First month after sales (60%)________
Second month after sales (30%)________
Total Cash Receipts________
Cash disbursements________
Raw materials________
Rent________
Other Expenditures________
Tax prepayments________
Total Cash Disbursement________
Net Change in Cash________
Net change in cash for period ________
(+) Beginning cash balance________
(-) Interest on short-term borrowing________
(-) Short-term borrowing repayments________
(=) Ending cash balance b/borrowing ________ (December= 22000)
New Financing Needed________
Financing needed for period ________
Ending cash balance________
Cumulative borrowing________

B.) Sharpe has \$200,000 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________

P #6A.

The Sharpe Corporation’s projected sales for the first eight months of 2011 are as follows:

January 89900
February 119500
March 134900
April 239100
May 300700
June 269000
July 225900
August 150600

Of Sharpe’s sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$219,100 (Nov) and \$175,600 (Dec) respectively. Sharpe purchases it’s raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays \$9,300 per month for rent and \$19,500 each month for other expenditures. Tax prepayments of \$22,500 are made each quarter, beginning in March. The company’s cash balance at December 31, 2010 was \$21,500; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (10%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$55,710 these funds would be borrowed at the beginning of April with interest of \$464 (i.e. 10%*1/12 *\$55,710) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Shapre covering the first seven months of 2011.
Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________
Cash Receipts________
Sales for Cash (10%)________
First month after sales (60%)________
Second month after sales (30%)________
Total Cash Receipts________
Cash disbursements________
Raw materials________
Rent________
Other Expenditures________
Tax prepayments________
Total Cash Disbursement________
Net Change in Cash________
Net change in cash for period________
(+) Beginning cash balance________
(-) Interest on short-term borrowing________
(-) Short-term borrowing repayments________
(=) Ending cash balance b/borrowing________ (December= 21000)
New Financing Needed________
Financing needed for period________
Ending cash balance________
Cumulative borrowing________

B.) Sharpe has \$199,200 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________
Submitted: 5 years ago.
Category: Multiple Problems
Expert:  linda_us replied 5 years ago.

Hi

Welcome to JA. I can help you with these questions. Whats your deadline for these questions?

Regards

Linda

Customer: replied 5 years ago.
I have to have them by 4/14 but the sooner the better.
Customer: replied 5 years ago.
Also, if it isn't too much trouble I would apprecitate some notes on how you arrived at the calculations. I would like to not have to ask for help on similar problems for future as I beleive it is important that I know how to do them too.
Expert:  linda_us replied 5 years ago.
I can help you with these but the amount you are currently offering does not compensate for the work involved. Please consider revising your offer.
Customer: replied 5 years ago.
I will look at compensating you more once I get paid this Friday. I live on a tight budget and this is what I can do at this point, but I will know more Friday. I appreciate your help with these problems! I look forward to reviewing your solutions.
Expert:  linda_us replied 5 years ago.
Ok I will post the solution before your deadline.
Customer: replied 5 years ago.

Hi Linda!

I was just following up on the problems that you are helping me with. Are you close to having those for me? These are due tomorrow, so I just want to make sure that I get them submitted on time.

Also, I looked at my account and I can compensate you \$35 for these solutions. So I will increase that amount once I receive the solutions.

Thanks so much!!!

Expert:  linda_us replied 5 years ago.
Sure. I will post today.

Regards

Linda
Expert:  linda_us replied 5 years ago.
Please check the beginning balance for each scenario? There is some discrepancy in the data?
Customer: replied 5 years ago.
I am headed to job #2 right now so I willcheck the numbers for any discrepancies and let you know as soon as I can.
Expert:  linda_us replied 5 years ago.
Let me know by tonight as I need to finish this assignment today itself as I might not be available tomorrow.

Regards

Linda
Customer: replied 5 years ago.
Ok..I'm almost to work so I will get on the computer and check real quick.
Expert:  linda_us replied 5 years ago.
Thanks
Customer: replied 5 years ago.
It appears as if the information is correct. I can have the due date extended to Sunday. Can I check with my professor on the data and post his response by tomorrow for you. Then have you post the solution by Sunday?
Expert:  linda_us replied 5 years ago.
Thank you for the up date. But if we take the Opening Cash Balance for question 3 then the loan amount given in the question does not match.
Customer: replied 5 years ago.
I trust that you are correct. I will email my professor right away and post his response ASAP. could you complete this on Sunday if I get back.to you on Sunday?
Customer: replied 5 years ago.
Correction....if I post his response tomorrow can you post the solution to question 3 on Sunday?

Also do you have the first two done? Of so can you posy for my review in the meantime?
Expert:  linda_us replied 5 years ago.
Even within the question see this

Question PP #6.

"The company’s cash balance at December 31, 2010 was \$32,300"
(=) Ending cash balance b/borrowing ________ (December= 21300)

P #6A.
The company’s cash balance at December 31, 2010 was \$21,500
(=) Ending cash balance b/borrowing________ (December= 21000)

I can prepare a solution in such a way that you just need to change opening cash balance and everything would be adjusted automatically (I will highlight the part that need to be changed in green) or I wait for the information from your professor.

Let me know what suits you.

Regards

Linda
Customer: replied 5 years ago.
Oh wow! Maybe that's why I had trouble figuring it out!. I will just post the answer from the professor tomorrow and look for your response by Sunday! Sorry for the confusion! But thanks so much!
Expert:  linda_us replied 5 years ago.
Ok..I might be available tomorrow in the day but will be back around 8 pm EST. Do not worry I will complete your assignment before Sunday afternoon.

Regards

Linda
Customer: replied 5 years ago.
You are wonderful! Thank you!
Expert:  linda_us replied 5 years ago.
Thank you so much..
Customer: replied 5 years ago.

Hi Linda-

Here is the revised problems from the professor!:

PP #6.

The Sharpe Corporation's projected sales for the first eight months of 2011 are as follows:

January 90,300

February 120,300

March 134,300

April 240,900

May 300,600

June 270,900

July 224,200

August 150,600

Of Sharpe's sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$219,900 (Nov) and \$176,000 (Dec) respectively. Sharpe purchases it's raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays\$10,600 per month for rent and \$19,300 each month for other expenditures. Tax prepayments of \$22,300 are made each quarter, beginning in March. The company's cash balance at December 31, 2010 was \$21,300; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (11%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$60,190 these funds would be borrowed at the beginning of April with interest of \$552 (i.e. 11%*1/12*\$60,190) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Shapre covering the first seven months of 2011.

Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________ Cash Receipts________

Sales for Cash (10%)________

First month after sales (60%)________

Second month after sales (30%)________

Total Cash Receipts________

Cash disbursements________

Raw materials________

Rent________

Other Expenditures________

Tax prepayments________

Total Cash Disbursement________

Net Change in Cash________

Net change in cash for period ________

(+) Beginning cash balance________

(-) Interest on short-term borrowing________

(-) Short-term borrowing repayments________

(=) Ending cash balance b/borrowing ________ (December= 21300)

New Financing Needed________

Financing needed for period________

Ending cash balance________

Cumulative borrowing________

B.) Sharpe has \$199,400 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________

PP #7.

The Sharpe Corporation's projected sales for the first eight months of 2011 are as follows:

January 90000

February 120000

March 135000

April 240000

May 300000

June 270000

July 225000

August 150000

Of Sharpe's sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$220,000 (Nov) and \$175,000 (Dec) respectively. Sharpe purchases it's raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays\$10,000 per month for rent and \$20,000 each month for other expenditures. Tax prepayments of \$22,500 are made each quarter, beginning in March. The company's cash balance at December 31, 2010 was \$22,000; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (12%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$60,500 these funds would be borrowed at the beginning of April with interest of \$605 (i.e. 12%*1/12 *\$60,500) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Sharpe covering the first seven months of 2011.

Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________ Cash Receipts________

Sales for Cash (10%)________

First month after sales (60%)________

Second month after sales (30%)________

Total Cash Receipts________

Cash disbursements________

Raw materials________

Rent________

Other Expenditures________

Tax prepayments________

Total Cash Disbursement________

Net Change in Cash________

Net change in cash for period ________

(+) Beginning cash balance________

(-) Interest on short-term borrowing________

(-) Short-term borrowing repayments________

(=) Ending cash balance b/borrowing ________ (December= 22000)

New Financing Needed________

Financing needed for period ________

Ending cash balance________

Cumulative borrowing________

B.) Sharpe has \$200,000 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________

P #6A.

The Sharpe Corporation's projected sales for the first eight months of 2011 are as follows:

January 89900

February 119500

March 134900

April 239100

May 300700

June 269000

July 225900

August 150600

Of Sharpe's sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$219,100 (Nov) and \$175,600 (Dec) respectively. Sharpe purchases it's raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays \$9,300 per month for rent and \$19,500 each month for other expenditures. Tax prepayments of \$21,500 are made each quarter, beginning in March. The company's cash balance at December 31, 2010 was \$21,000; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (10%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$55,710 these funds would be borrowed at the beginning of April with interest of \$464 (i.e. 10%*1/12 *\$55,710) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Sharpe covering the first seven months of 2011.

Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________ Cash Receipts________

Sales for Cash (10%)________

First month after sales (60%)________

Second month after sales (30%)________

Total Cash Receipts________

Cash disbursements________

Raw materials________

Rent________

Other Expenditures________

Tax prepayments________

Total Cash Disbursement________

Net Change in Cash________

Net change in cash for period________

(+) Beginning cash balance________

(-) Interest on short-term borrowing________

(-) Short-term borrowing repayments________

(=) Ending cash balance b/borrowing________ (December= 21000)

New Financing Needed________

Financing needed for period________

Ending cash balance________

Cumulative borrowing________

B.) Sharpe has \$199,200 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________

Expert:  linda_us replied 5 years ago.
Thanks.
Expert:  linda_us replied 5 years ago.

Please CLICK HERE fro Solution 1

Please CLICK HERE fro Solution 2

Please CLICK HERE fro Solution 3

Please note that I get credit for my work only when you click accept.

As discussed you can add the remaining amount as Bonus.

Regards

Linda
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