Excel Applications for Accounting Principles 4th Edition by Gaylord Smith

Exercise 3

PROBLEM DATA
Ranger Industries has provided the following information at June 30:

Projected cash payments:
Inventory purchases are paid for in the month following acquisition.
Variable cash expenses, other than inventory, are equal to 25% of each month's sales and are paid in the month of sale.
Fixed cash expenses are $40,000 per month and are paid in the month incurred.
Depreciation on equipment is $2,000 per month.
REQUIREMENT
Review the completed master budget and answer the following questions:
a. Is Ranger Industries expecting to earn a profit during the next quarter If so, how much
b. Does the company need to borrow cash during the quarter Can it make any repayments
Explain. (Carefully review rows 74 through 80.)