Question
Q1. Big City Manufacturing (BCM) is preparing its cash budget and expects to have sales of $450,000 in January, $375,000 in February, and $555,000 in
Q1.Big City Manufacturing (BCM) is preparing its cash budget and expects to have sales of $450,000 in January, $375,000 in February, and $555,000 in March.If 20% of the sales are for cash, 45% are credit sales paid in the month after the sale, and another 35% are credit sales paid 2 months after the sale, what are the expected cash receipts for March?
1a.In problem 1, Big City Manufacturing (BCM) assumed that all credit sales were paid in full, with no bad debt expense.For this problem, please assume that bad debt expense is again 0% for BCM.Purchases for next month's sales are 50% of projected sales for the next month, and April sales are estimated to be $495,000; purchases for April are paid in cash in March."Other payments," which include wages, rent, and taxes, are 25% of sales for the current month. Construct a cash budget for March using your expected cash receipts from problem 1 and calculate the average net cash flow during the month of March
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