Question
Ivanhoe Industries is preparing its cash budget for the third quarter of the current year. Sales for the third quarter are budgeted at $ 702000
Ivanhoe Industries is preparing its cash budget for the third quarter of the current year. Sales for the third quarter are budgeted at $ 702000 ($ 234000 per month). Sales are 70% cash, with the remaining 30% on credit which is collected in the month following the month of sale. On June 30, the cash balance is $ 38900, and the Accounts Receivable (all related to June sales) balance is $ 41000. Operating expenses for the quarter are budgeted at $ 371300, which includes $ 14600 of depreciation. Cash expenses are paid in the month incurred. Cash purchases for merchandise inventory are budgeted at $ 314400 for the quarter. To prepare for the busy fourth quarter, Ivanhoe's desired cash balance on September 30 is $ 121500. How much financing will the company need at the end of the third quarter?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started