Fortner Manufacturing has a cash balance of $8,000 on August 1 of the current year. The company's controller forecast the following cash receipts and cash disbursements for the upcoming two months of activity:?Cash ReceiptsCash PaymentsAugust$45,000$57,000September66,00056,000Management desires to maintain a minimum cash balance of $8,000 at all times. If necessary, additional financing can be obtained in $1,000 multiples at a 12% interest rate. All borrowings are made at the beginning of the month; debt retirement, on the other hand, occurs at the end of the month. Interest is paid at the time of repaying loan principal and is computed on the portion of debt repaid.Required: A. Determine the ending cash balance in August both before and after any necessary financing or debt
retirement.B. Repeat part "A" for September.
What will be an ideal response?
| A. Beginning Cash balance | $8,000 |
| Add: Cash receipts | 45,000 |
| Subtotal | $53,000 |
| Less: Cash payments | (57,000) |
| Cash balance before financing/retirement | $ (4,000) |
| Financing: | ? |
| Borrowing to maintain minimum | 12,000 |
| Ending cash balance | $8,000 |
| ? | ? |
| B. Beginning cash balance | $8,000 |
| Add: Cash receipts | 66,000 |
| Subtotal | $74,000 |
| Less: Cash payments | (56,000) |
| Cash balance before financing/retirement | $18,000 |
| Financing: | ? |
| Principal repayment | (9,000) |
| Interest payment ($9,000 × 12% × 2/12) | (180) |
| Ending cash balance | $8,820 |
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Craig's Snowboards uses the perpetual inventory system and the gross method of accounting for sales, and had the following sales transactions during June: June 2Sold merchandise to General Sports Store on credit for $4,800, terms 1/15, n/60. The items sold had a cost of $2,700.June 4General Sports Store returned merchandise that had a selling price of $200. The cost of the merchandise returned was $110.June 13General Sports Store paid for the merchandise sold on June 2 less the return, taking any appropriate discount earned.Prepare the journal entries that Craig's Snowboards must make to record these transactions.
What will be an ideal response?
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