A finished ACC-361 Topic 2 cash budget shortfall analysis example, carrying a sales forecast through linked schedules to a cash gap and pricing three ways of closing it. Searches like "acc 361 topic 2 assignment example", "acc361 topic 2 sample" and "acc-361 topic 2 example" land here.
What a finished ACC-361 Topic 2 cash budget shortfall analysis looks like
On the page sit seven schedules for one quarter, with illustrative figures and a reference line under each naming the schedule that supplied its input. Forecast sales drive production once desired ending inventory is added, production drives materials purchases, and purchases drive the disbursement pattern. Collections follow the stated credit terms, so a month of strong sales shows up as cash only partly in that month and mostly in the one after. The cash budget then exposes the problem: rising sales pull purchases forward while collections lag, and the balance falls below the policy minimum in the second month. Three responses are costed against each other: drawing on a line of credit, delaying a planned equipment purchase by one month and offering customers an early-payment discount. The chosen response is defended, and both rejected ones carry their price.
How an ACC-361 Topic 2 example is structured
Every schedule in the analysis takes its starting figure from one already on the page. The sales budget opens it, stating the forecast in units and dollars along with the collection pattern that will matter later. Production follows, adding desired ending inventory and subtracting what is on hand, and it hands its output to the materials and labor schedules. Overhead and selling expense schedules separate the cash items from depreciation, which never reaches the cash budget. Collections and disbursements come next as two short schedules, each month's figures traced to the sales and purchases that produced them. The cash budget brings the pieces together, showing opening balance, receipts, payments and the month the minimum is breached. A closing section compares the three responses by cost and by risk, recommends one and gives the dollar figure attached to each response set aside.
Inputs referenced to their source schedule
Each schedule lists the earlier schedule behind its first figure, which lets a reader follow a change in the sales forecast all the way to the cash balance.
Collections lagging the sales behind them
Credit terms push part of each month's sales receipts into the following month, and that lag is what turns a growing quarter into a cash squeeze.
Depreciation kept out of payments
The overhead schedule strips out depreciation before disbursements are totaled, since an expense that moves no cash would otherwise overstate the shortfall and distort the response.
Three responses with prices attached
Interest on the credit line, the output lost by delaying equipment and the discount given away to customers are each computed for the months affected.
A recommendation with a named owner
The chosen response is assigned to the treasurer or the operations manager who would carry it out, so the plan has a person behind the fix.
Where marks go in ACC-361 Topic 2
Budgets in this topic lose credit where one schedule stops talking to another. A production schedule that ignores the ending inventory policy produces purchases and labor figures that are consistently wrong, and every later schedule inherits the error. Collections entered in the month of sale, regardless of the credit terms given, hide the very shortfall the cash budget exists to show. Depreciation carried into disbursements overstates the cash needed and is marked as a misunderstanding rather than a slip. Analyses that find the shortfall and stop there leave the decision undone, and a recommendation with no cost set against the rejected options is an opinion about financing. Sections frequently expect the minimum cash balance to hold in every month, so a plan that dips below it without comment is incomplete.
Get an ACC-361 Topic 2 example written to your instructions
Send your ACC-361 Topic 2 instructions, the rubric and the sales forecast or budget data your section supplied. We write a custom example to them, with every schedule linked to its source, collections timed to the credit terms, the shortfall located and each response costed, in 24 to 48 hours. The first one costs nothing.
ACC-361 Topic 2 questions, answered
Why can a profitable budget run out of cash?
Because profit is measured on an accrual basis and cash moves on its own timetable. When sales grow, the business buys materials and pays labor before customers pay for the goods, so cash goes out ahead of the receipts that will eventually cover it. The budgeted income statement shows the profit in the month of sale; the cash budget shows the gap in between.
Which schedule should be built first?
The sales budget, since every other schedule depends on it directly or through production. Production needs forecast sales and the inventory policy; materials and labor need production; collections need sales and the credit terms; disbursements need purchases and payroll. Building in that order means a change to the forecast can be carried through the whole plan instead of patched into one schedule.
Is borrowing always the right answer to a shortfall?
Not automatically. The example prices each alternative because a short draw on a credit line may cost less than delaying equipment that would have raised output, or more than a modest discount that speeds collections. The right answer depends on the figures and on the risk each response carries, and rubrics commonly want that comparison on the page.