ACCT 320 The CEO needs your help with cash projections for the period March 2016
The CEO needs your help with cash projections for the period March 2016-June 2016. Accounting department has the following information:
February 2016 | March 2013 | April 2013 | May 2013 | June 2013 | |
Sales | $ 325,000 | $500,000 | $399,000 | $314,000 | $540,000 |
Material Purchases | $ 177,500 | $ 347,000 | $244,000 | $183,000 | $394,000 |
Payroll | $27,500 | $37,000 | $32,000 | $28,500 | $41,500 |
Other Disbursements | $20,000 | $25,000 | $5,000 | $37,000 | $27,000 |
(a) Cash Sales offer 2% discount. Sales are 60% cash, 40% credit. 2% of credit sales are bad debts. The 40% credit portion of sales |
is paid equally between the month of the sale and the following month. |
(b) Material purchases are paid 50% in the month of purchase and reaming 50% during the next month.
(c) Payroll and other disbursements are paid in the month these are incurred.
(d) Cash balance was $ 89,000 as of March 1, 2016.
You are required to prepare the Cash Projections for the period March 2016-June 2016. Please show your calculations that include closing balances |
for cash in hand. |
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Rating:
/5
Solution: ACCT 320 The CEO needs your help with cash projections for the period March 2016