Question
Exquisite Shoes are stockists of industry-approved safety boots. The company is planning for the quarter ending in December and has supplied the following information: Purchases
Exquisite Shoes are stockists of industry-approved safety boots. The company is planning for the quarter ending in December and has supplied the following information:
Purchases
The forecast purchases of raw materials for the next three months are:
Month Purchases ($)
October 70 000
November 75 000
December 80 000
40% of its purchases are in cash, and the remainder is on credit. Of the credit purchases, 50% is paid in the month of purchase, and the other 50% is paid in the month after the purchase. The September 30 accounts payable balance is $30 000
Required:
Prepare a schedule of expected cash disbursements for each of the three months (October - December), including the total cash payments of raw materials for the quarter.
Suggest two ways Exquisite Shoes can improve its cash position in the next quarter.
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