Hayes Inc is growing steadily, causing some concerns
about its cash flow. the company's estimated sales and purchases
for the past 3 months plus projected sales and purchases for the
next 3 months are shown below. half of hayes sales are for cash.
the company's average collection period from customer isn60 days.
its standard pay terms with suppliers isn30 days.
a. what are the company's expected cash receipts in March?
b. what would the companys account receivable balance be at the end
of March?
c. what are the company's expected cash expenditures for purchases
in March?
d. what would the companys account payable balance at the end of
March?
Homework Answers
Calculation of Cash and Credit receipt
| Particular | October | November | December | January | Feburary | March |
| Total Sales | 2,50,000 | 2,75,000 | 3,00,000 | 3,25,000 | 3,50,000 | 4,00,000 |
| cash Receipt | 1,25,000 | 1,37,500 | 1,50,000 | 1,62,500 | 1,75,000 | 2,00,000 |
| Credit Receipt | - | - | 1,25,000 | 1,37,500 | 1,50,000 | 1,62,500 |
| Total Receipt | 1,25,000 | 1,37,500 | 2,75,000 | 3,00,000 | 3,25,000 | 3,62,500 |
Calculation of Cash and Credit payment
| Particular | October | November | December | January | Feburary | March |
| Total purchase | 1,75,000 | 2,00,000 | 2,25,000 | 2,50,000 | 2,75,000 | 3,00,000 |
| Payment | - | 1,75,000 | 2,00,000 | 2,25,000 | 2,50,000 | 2,75,000 |
1.Company's expected cash receipt in march is $ 3,62,500.
2. Account Receivable balance at the end of March $ 1,75,000 + $ 2,00,000 = $ 3,75,000.
3. Cash Expenditure for March is $ 2,75,000.
4. Balance of Payable at end of March is $ 3,00,000.
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