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Question: Please create a cash collections table for company A. A Company Assume level sales; a 45-day collection period implies 1/2 of a month's sales

Question: Please create a cash collections table for company A.

A Company

Assume level sales; a 45-day collection period implies 1/2 of a month's sales are collected in the subsequent month and 1/2 in the second month after sale.

Information for the first-quarter for the A Company;

  • All sales on credit. The sales forecast is:

January: $55,000

February: $65,000

March: $65,000

April: $60,000

  • November sales were $80,000; December sales were $95,000; the average accounts receivable period is 45 days; December 31st receivables were $135,000.
  • Wages, taxes, and other expenses are 30% of sales.
  • Raw materials are purchased on credit with an average payable period of 30 days. Raw materials are ordered two months in advance of forecasted sales and are 50% of sales.
  • The annual cash dividend of $100,000 is to be paid in March.
  • No capital expenditures are planned for the first three months.
  • The beginning cash balance is $41,000. The minimum cash balance is $25,000.

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