[sitti]

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[sitti]

@sitti23 said:
Months sales purchases
april(actual) 640000 210000
May(actual) 600000 240000
June(forecast) 550000 240000
July(forecast) 550000 360000
Aug.(forecast) 580000 4000000
Sept.(forecast) 660000 340000

Assumptions:
Company makes 10% of its sales on cash and 90% on credit.the credit sales,20% are collected ìn the month after the sales and 80% are collected two months after. The company pays 40% of its purchases in the month after purchases and 60% two months after.
Direct labor cost equals 10% of the purchases month.overhead expense equals 24000 per month. Interest payment of 60000 are due in june and sept. A depreciation cost of 20000 per month is allocated.the bad debts are assume to be 10% of sales uncollectible. A cash dividends of 100000 is schedule to be paid july.taxes is 5% of sales are due every month.there is a schedule capita outly of 200000 for july and sept.
the company ending cash balance for may is 40000. The minimum desired balance is 30000. Preparea schedule of monthly cash receipts, monthly cash payments and complete monthly cash budget with borrowing and repayment for june-sept. The maximum desired cash balance is 100000.excess cash (above 100000) is used to buy trading and securities. Trading securities are sold prior to borrowing funds in case of a cash short fall (less than 30000)

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