=+10-27 KK Cash-flow analysis (Appendix 10-1) (CMA, adapted)

TabComp Ltd is a retail distributor for MZB-33 computer hardware and related software and support services. TabComp prepares annual sales forecasts of which the first six months for 2014 are presented here.

Cash sales account for 25% of TabComp’s total sales, 30% of the total sales are paid by bank credit card and the remaining 45%

are on open account (TabComp’s own charge accounts). The cash sales and cash from bank credit card sales are received in the month of the sale. Bank credit card sales are subject to a 4% discount deducted at the time of the daily deposit. The cash receipts for sales on open account are 70% in the month following the sale and 28% in the second month after the sale. The remaining accounts receivable are estimated to be uncollectable.