Question 2

HASF Inc a distributor of cosmetics throughout Karachi, is in the process of assembling a cash budget for the first quarter 2015 the following information has been extracted from the company s' accounting records

1.All sales divided in equal part between cash and credit sales. 45 % of credit sales are collected in the month of sales 45% are collected in the following month and remaining is uncollectible. Management believes that only 20% of the a/c receivable outstanding on December 2014 will be recovered that the recovery will be in January 2015

2.65% of Purchase are paid for in the month of purchase the remaining 35% are paid for in the month after acquisition

3.The December 31 2014 balance sheet disclosed the following selected figures cash 20,000 a/c receivable 55,000 and a/c payable 22,000

4.Company Maintains a 20,000 minimum cash balance at all time. Financing is available in 1,000 multiples at an 8% interest rate interest is paid ate the time of repaying principle.

Additinal data:

Jan Feb March

Sales 150,000 180,000 185,000

Purchases 90,000 100,000 140,000

Cash operating cost 31,000 24,000 45,000

Proceeds from the sales of equipment 5,000

Required:

1. Total amount of cash will be received at end March 31 ( Jan + Feb + March )

2. Total amount of total cash disburstment at end of March 31 ( jan + feb + march )

3. Total amount of loan ( jan + feb + March )

4. Cash balacne at end of March 31