Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

only need the cash budget. i meant to say only need cash recipts part of the cash budget. budg 15-2 Vertical Ladder Company (VLC) forecasts

only need the cash budget.
image text in transcribed
image text in transcribed
i meant to say only need cash recipts part of the cash budget.
budg 15-2 Vertical Ladder Company (VLC) forecasts that its sales for January through April will be $60,000, $70,000, $90,000, and $80,000, respectively. All sales are made on credit, and past experience indicates that 30 percent of the sales will be collected in the month of the sale and that the remaining 70 percent will be collected the following month. Customers who pay in the month of the sale will take the 2 percent cash discount offered by VLC for paying early. VLC normally purchases and pays OT the sales prices, one month prior to selling the finished products. Employees' wages represent 25 percent of the sales price, and rent is $3,000 per month. At the beginning of February, VLC expects to have $4,000 in cash, which is $1,000 greater than its target cash balance. Using the information provided, construct a cash budget for February and March

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The VAR Implementation Handbook

Authors: Greg Gregoriou

1st Edition

007161513X, 978-0071615136

More Books

Students also viewed these Finance questions