Boblema s o any is planning i third quarte r information has the for the thindute in the wonder h s of the home which during A lead to assist in preparing cash b e fore the quarter w money during the . The following M e d monthly income Matements for July through October are as follows Cost of 30.000 24 000 16.000 0.00 000 .000 0.00 OOO 000 2700D 20.000 LOO 2D Song and actress B yepone... . Actre ........ andartexpenses.. Nel operating income. ***** 5,100 T S 5,400 S 4 ROD b. Sales are 20% for cash and 80% on credit e. Credit sales for July August and September are collected with 25% in the month of sale, 60% in the month following sale, and 15% in the second month following sale. May and Jung credit sales were collected with 10% collected in the month of sale, 70% in the month following sales and 20% in the second month following sale. May sales totaled $30.000, and June sales totaled $36,000. d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable for inventory purchases at June 30 total $11,700. e. Total monthly purchases are calculated as the current month's cost of goods sold plus the desired monthly ending inventory minus the beginning inventory for the month. The company maintains its ending inventor levels at 25% of the cost of the merchandise to be sold in the following month. The merchandise inventory at June 30 is $18,000. f. Land costing S4,500 will be purchased in July. 8. Dividends of $1,000 will be declared and paid in September. h. The cash balance on June 30 is $8,000; beginning in July, the company modified its policy so that now needs to maintain a cash balance of at least $20,000 at the end of each month. 1. The company has an agreement with a local bank that allows it to borrow in increments of $1,000 att beginning of each month, up to a total loan balance of $40,000. The interest rate on these loans is 1% month. Problems Canon C ameradigany any is planning cash for the third to the third quarter tout es of ha a r inihaheed to impact d o wor d bew during the wpplies. The oney during the the following the monthly incest o Puty through the follow C . SEN S . . andr Netporno . es.. . S DO 54 D b. Sales are 20% for cash and 80% on credit. e. Credit sales for July August and September are collected with 25% in the month of sale, 60% in the month following sale, and 15% in the second month following sale. May and June credit sales were collected with 10 collected in the month of sale, 70% in the month following sale, and 20% in the second month following sale. May sales totaled $30,000, and June sales totaled $36,000. d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable for inventory purchases at June 30 total $11,700. e. Total monthly purchases are calculated as the current month's cost of goods sold plus the desired monthly ending inventory minus the beginning inventory for the month. The company maintains its ending inventory levels at 25% of the cost of the merchandise to be sold in the following month. The merchandise inventory at June 30 is $18,000. f. Land costing $4,500 will be purchased in July. g. Dividends of $1,000 will be declared and paid in September. h. The cash balance on June 30 is $8,000; beginning in July, the company modified its policy so that now needs to maintain a cash balance of at least $20,000 at the end of each month. 1. The company has an agreement with a local bank that allows it to borrow in increments of $1.000 at the beginning of each month, up to a total loan balance of $40,000. The interest rate on these loans is 1% per month
