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Jan Feb Mar Sales Cash Credit Apr May 2.a BusFin Enterprises Jan Collections Cash Sales BusFin pays its purchases in the following month. BusFin had
Jan Feb Mar Sales Cash Credit Apr May 2.a BusFin Enterprises Jan Collections Cash Sales BusFin pays its purchases in the following month. BusFin had a cash balance of $2,000 on March 1, which is also its minimum required cash balance. There is an outstanding loan of $2,000 on March 1. a) Prepare a schedule of cash receipts for March, April and May. (6pts) b) Prepare a schedule of cash payments for March, April and May. (3pts) c) Prepare a cash budget for March, April and May. (6pts) 70% of the firm's sales are on credit. Past experience shows that 40% of accounts receivable are collected in the month after sale, and the remainder are collected in the second month after sale. d) Based on the cash budget what loan limit would you recommend? Explain how you came to this amount. (3pts) Sales $14,000 $20,000 $26,000 $22,000 $18,000 e) What is the value of BusFin's accounts receivable and accounts payable at the end of May (2pts) Total Collections % in following month % in second month for the first part of the year to be: Purchases $18,000 $21,300 $19,100 $22,400 $14,700 Feb Jan Mar Feb Mar 5 Apr Apr May May 5 TION RATIOS Sales (credit) Receivables urnover= tion period i 15 Accounts Average daily
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