Cash Forecasting. Mr. Otley started a used computer store in London and is looking at cash flows very carefully. He collected the following budget figures for 1998 in pounds:

Required:
Prepare a cash forecast for 1998 for Otley’s budgeted operations.

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Cash Accounts receivable. Inventory Prepaid expenses 12/31/97 12/31/98 12/31/97 12/31/98 4,000 7,000 Accounts payable.... 19,000 26,000 12,000 20,000 Wages payable ... 4,000 6,000 40,000 30,000 Income taxes payable. 10,000 6,000 5,000 7,000 Interest payable... 2,000 1,000 1998 Income Statement 25,000 11,000 (Including depreciation expense of 3,000) Sales..... Cost of goods sold Gross profit.. Operating expenses Operating income. Interest expense. Income before taxes Taxes expense. Net income.. 100,000 75,000 14,000 3,000 11,000 5,000 6,000