XYZ has forecast its sales revenues and purchases for the last 5 months of 2015 to be as follows: Sales Purchase August 22,000 and 17,000 September 15,000 and 19,500 October 25,000 and 29,000 November 30,000 and 20,000 December 26,000 and 24,000 60% of sales are on credit. On the basis of past experience, 50% of the accounts receivable is collected the month after the sale and the remainder are collected 2 months after the sale. Purchases are paid 30 days after they are incurred. The firm has a cash balance of $5,000 on hand as of October 31, but its minimum required cash balance is $4,000 A. Prepare a schedule of cash receipts for October, November, and December. B. Prepare a cash budget for the same period.

XYZ has forecast its sales revenues and purchases for the last 5 months of 2015 to be as follows: Sales Purchase August 22,000 and 17,000 September 15,000 and 19,500 October 25,000 and 29,000 November 30,000 and 20,000 December 26,000 and 24,000 60% of sales are on credit. On the basis of past experience, 50% of the accounts receivable is collected the month after the sale and the remainder are collected 2 months after the sale. Purchases are paid 30 days after they are incurred. The firm has a cash balance of $5,000 on hand as of October 31, but its minimum required cash balance is $4,000 A. Prepare a schedule of cash receipts for October, November, and December. B. Prepare a cash budget for the same period.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 3P

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