Question

Mary and Kay, Inc, a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of All sales are on account. Sixty percent of customer accounts are collected in the month of sale: 35 percent are collected in the ·Sixty percent of the merchandise purchases are paid for in the month of purchase, the remaining 40 percent are paid for in the 20x1. The following information has been extracted from the company's accounting records: following month. Uncollectibles amounting to 5 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1 month after acquisition. The December 31, 20x0 and accounts payable, $86,000. Mary and Kay, Inc. maintains a $85,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 9 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time. sheet disclosed the following selected figures: cash, $85,000: accounts receivable, $265,000; Sales revenue 5e0,800 620,e00 155,080 35,000 Cash operating costs 113,08 92,880 ReferencesRequired: 1. Prepare a schedule that discloses the firm's total cash collections for January through March 2. Prepare a schedule that discloses the firm's total cash disbursements for January th 3. Prepare a schedule that summarizes the firm's financing cash flows for January through March. Total receipts

Answer 1

Answer