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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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