Suppose that the Sales in December 2019 were 64,566. The sales are expected to grow by 6% in January 2020, by 17% in February 2020, and by 10% in March 2020. After that, the sales are expected to grow by 14%. The purchases are 10% of sales. The purchases will be paid in the same month. The general administrative expenses are $13,032 and will be paid in the same month. The depreciation expense is $6,611 per month. The interest expenses are $8,778 per quarter and will be paid in March, June, September, and December. What is the cash outflow for June, 2020?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 14EB: Earthies Shoes has 55% of its sales in cash and the remainder on credit. Of the credit sales, 70% is...
icon
Related questions
Question

Suppose that the Sales in December 2019 were 64,566. The sales are expected to grow by 6% in January 2020, by 17% in February 2020, and by 10% in March 2020. After that, the sales are expected to grow by 14%.

The purchases are 10% of sales. The purchases will be paid in the same month. The general administrative expenses are $13,032 and will be paid in the same month. The depreciation expense is $6,611 per month. The interest expenses are $8,778 per quarter and will be paid in March, June, September, and December.

What is the cash outflow for June, 2020?

Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Forecasting Financial Statement
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Entrepreneurial Finance
Entrepreneurial Finance
Finance
ISBN:
9781337635653
Author:
Leach
Publisher:
Cengage
Corporate Fin Focused Approach
Corporate Fin Focused Approach
Finance
ISBN:
9781285660516
Author:
EHRHARDT
Publisher:
Cengage