Question

Saved CHAPTER FOUR HOMEWORK 6 4 Graham Potato Company has projected sales of $6,000 in September, $10,000 in October, $16,000 in November, and $12,000 in December. Of the company's sales, 20 percent are paid for by cash and 80 percent are sold on credit. Experience shows that 40 percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after Determine collections for November and December 1.25 points Also assume Graham's cash payments for November and December are $13,000 and $6,000, respectively. The beginning cash balance in November is $5,000, which is the desired minimum balance. a. Prepare a cash receipts schedule for November and December eBook Graham Potato Company Cash Receipts Schedule Hint September October November December Sales Print Credit sales Cash salos One month after sale Two months after sale References Total cash receipts b. Prepare a cash budget with borrowing needed or repayments for November and December. (Negative amounts should be indicated by a minus sign. Assume the November beginning loan balance is So.) Graham Potato Company <Prev 4 of 4 Next>

Answer 1

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Cash receipt schedulle
	September	October	November	December
Sales	6000	10000	16000	12000
Credit sales	4800	8000	12800	9600
Cash sales			3200	2400
One month after sales			3200	5120
Two month after sales			2880	4800
Total cash receipt			9280	12320
Cash budget
		November	December
Total cash receipt		9280	12320
Total cash payment		-13000	-6000
Net cash flow		-3720	6320
Beginning cash balance		5000	5000
Cumulative cash balance		1280	11320
Monthly borrowing(repayment)		3720	-3720
Cumulative loan balance		3720	0