Chapter 1, Problem 42P

Suppose the company has just the opposite news and now expects unit sales for August, September, and October to be double (200%) the original estimates. What effect will this have on the company’s net income and borrowing? Explain your findings.

On January 1, Sweet Pleasures, Inc., begins business. The company has 14,000 cash on hand and is attempting to project cash receipts and disbursements through April 30. On May 1, a note payable of 10,000 will be due. This amount was borrowed on January 1 to carry the company through its first four months of operation. The unit purchase cost of the companys single product, a box of Sweet Pleasures chocolates, is 12. The unit sales price is 28. Projected purchases and sales in units for the first four months are: Sales terms call for a 5% discount if paid within the same month that the sale occurred. It is expected that 50% of the billings will be collected within the discount period, 25% by the end of the month after purchase, 19% in the following month, and 6% will be uncollectible. Approximately 60% of the purchases are paid for in the month purchased. The rest are due and payable in the next month. Total fixed marketing and administrative expenses for each month include cash expenses of 5,000 and depreciation on equipment of 2,000. Variable marketing and administrative expenses total 6 per unit sold. All marketing and administrative expenses are paid as incurred. REQUIREMENT You have been asked to prepare a cash budget for the next four months to see if the loan can be repaid. Review the worksheet CASHBUD that follows these requirements. The problem data have already been entered in the Data Section of the worksheet.

My Aunts Closet Store collects 60% of its accounts receivable in the month of sale and 35% in the month after the sale. Given the following sales, how much cash will be collected in March?

American Products is concerned about managing cash efficiently. On the average, inventories have an age of 90 days, and accounts receivable are collected in 60 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $30 million. Assume there is no difference in the investment per dollar of sales in inventory, receivables, and payables and that there is a 365-day year. a) Calculate the firm’s operating cycle. b) Calculate the firm’s cash conversion cyclec) Calculate the amount of resources needed to support the firm’s cash conversion cycle.

Please answer the question What are the estimated cash receipts for March, if 20 percent of sales are cash, 40 percent are credit sales paid in the month after the sale, and 40 percent are credit sales paid 2 months after the sale?  Answer it with complete solutions and explanations if needed. Thank you

From past experience, the company has learned that 20% of a month’s sales are collected in the month of sale, another 75% are collected in the month following sale, and the remaining 5% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $270,000, and March sales totaled $300,000.   Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. 2. What is the accounts receivable balance on June 30th?

Steves’s Discount Appliances expects sales of $15,000, $18,000, and $25,000 during April, May, and June (big sale in June). To build business, Steve let’s all customers buy on credit, and all do so. In the past, 20% of Steve’s Discount Appliances sales have been collected during the month of sale 65% are collected the following month, and 15% the month after that. If this trend continues, what will be Steve’s total cash collections in the month of June?

A firm has actual sales in November of $1,363 and projected sales in December and January of $2,928 and $3,396, respectfully. The firm makes 12 percent of its sales for cash, collects 46 percent of its sales one month following the sale, and collects the balance of 2 months following the sale. what are the firm's total cash receipts in January. what are the firm's total cash receipts in January?

A firm has projected sales in May, June, and July of P10,000, P20,000, and P30,000, respectively. The firm makes 20% of sales for cash and collects the balance one month following the sale. What is the firm’s total cash receipts in July?a. P18,000 c. P20,000b. P22,000 d. P24,000