10) Why do managers want to use a cash budget since they already have an operating income budget?
11) How do managers compute the receipts and disbursements on the schedule of cash collections?
12) Why do managers use sensitivity analysis in cash flow analysis?
13) The managerial accountant at Portsmouth Manufacturing reported the following information:
Schedule for Cash Collection
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Accounts receivable balance$1,750,000
on 1/1/2013
From first-quarter 2013 sales$7,500,000$1,900,000
From second-quarter 2013 sales9,000,000$2,200,000
From third-quarter 2013 sales8,500,000$2,100,000
From fourth-quarter 2013 sales 6,700,000
Total Collections
Required