FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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FIN 3004 Business Finance
Homework
In preparation for the quarterly
∙ The firm collects 60 percent of sales for cash and 40 percent of its sales one month later.
∙ Interest income of $50,000 on marketable securities will be received in December.
∙ The firm pays cash for 40 percent of its purchases.
∙ The firm pays for 60 percent of its purchases the following month.
∙ Salaries and wages amount to 15 percent of the preceding month's sales.
∙ Sales commissions amount to 2 percent of the preceding month's sales.
∙ Lease payments of $100,000 must be made each month.
∙ A principal and interest payment on an outstanding loan is due in December of $150,000.
∙ The firm pays dividends of $50,000 at the end of the quarter.
∙ Fixed assets costing $600,000 will be purchased in December.
∙
∙ The firm has a beginning cash balance in October of $100,000 and maintains a minimum cash balance of $200,000.
Transcribed Image Text:Month
Sales
$3,000,000
Purchases
August (actual)
September (actual)
October (forecast)
November (forecast)
December (forecast)
$3,500,000
$4,500,000
$2,000,000
$1,000,000
$1,500,000
$2,000,000
$ 500,000
$ 750,000
$1,000,000
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The total cash receipts have to be put in the final part?
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The total cash receipts have to be put in the final part?
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