Joseph Pharmacy had sales of $25,000 in December and $30,000 in January. The company expects sales of $20,000 in February and $40,000 in both March and April, and $30,000 in May. The company has no other source of cash inflows. Half of the sales are paid for with cash. Twenty-five percent are paid for in each of the two months following the sale.

Joseph Pharmacy has the following expenses: (show all of your work)

• Monthly rent of $1,500
• Wages of $5,000 each month
• Purchases

50% of next months sales

• • Cash Outlay
    • 20% in month purchased
    • 80% in following month

From the information provided:

1.Calculate the projected Cash Receipts for the three months of February, March, and April (Tables have been set up for you) (30 points)

Sales forecast	December	January	February	March	April
Cash Sales
Collection of AR: Lagged 1 Month Lagged 2 Months
Other Cash Receipts
Total Cash Receipts

2.Calculate the projected Cash Disbursements for the same months (40 points)

A Schedule of Projected Cash Disbursements for Joseph Pharmacy

Sales	December	January	February	March	April
Purchases (50% of next months sales) Current month .20 1 month lag .80
Rent payments
Wages/Salaries
Total

1. Indicate what the total cash balance would be at the end of these three months if the cash balance at the beginning of February was $1,500.(30 points)

February Cash balance
Total Cash Receipts	December	January	February	March	April
Cash Disbursements
Balance
Balance from Feb - April

4.Define cash inflows and cash outflows (10 points)