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b. KAM Limited is contemplating on buying an equipment to improve operations in June. KAM Limited, however, anticipates that it will not have adequate cash
b. KAM Limited is contemplating on buying an equipment to improve operations in June. KAM Limited, however, anticipates that it will not have adequate cash at the end of the month of December. The following below relates to the anticipated operations of KAM Limited for 6 months June - December. 1. The profit mark up on or purchase is 25% 2. Eighty percent of sales are collected in cash whereas 20% is in credit for one month. 3. Purchases are on deferred terms for one month. 4. General expenses, including depreciation expenses, is GHS35,000 per month; depreciation is GHS5,000 per month. 5. Variable general expenses are anticipated to be GHS2,000 in June and will increase monthly by GHS4,000. 6. Taxation is GHS14,000 and will be paid in November 7. The cost of the equipment is GHS200,000 8. The cash at the September is GHS 22,000
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