Reference no: EM131137808
The president of the retailer Prime Products has just approached the company's bank with a request for a $30,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some difficulty in paying off its loans in the past, the loan officer has asked for a cash budget to help determine whether the loan should be made. The following data are available for the months April through June, during which the loan will be used:
a. On April 1, the start of the loan period, the cash balance will be $24,000. Accounts receivable on April 1 will total $140,000, of which $120,000 will be collected during April and $16,000 will be collected during May. The remainder will be uncollectible.
b. Past experience shows that 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% represents bad debts that are never collected. Budgeted sales and expenses for the three-month period follow:
|
April
|
May
|
June
|
Sales (all on account)
|
$ 300,000
|
$ 400,000
|
$250,000
|
Merchandise purchases
|
210,000
|
160,000
|
130,000
|
Payroll
|
20,000
|
20,000
|
18,000
|
Lease payments
|
22,000
|
22,000
|
22,000
|
Advertising
|
60,000
|
60,000
|
50,000
|
Equipment purchases
|
-
|
-
|
65,000
|
Depreciation
|
15,000
|
15,000
|
15,000
|
c. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid during April, total $140,000.
d. In preparing the cash budget, assume that the $30,000 loan will be made in April and repaid in June. Interest on the loan will total 51,200.
Required: Prepare a schedule of expected cash collections for April, May, and June, and for the three months in total.
Rejection of the null hypothesis
: (a) What alternative hypothesis should the department use if it does not want to use the new tires unless they are definitely proved to give better mileage? In other words, the burden of proof is put on the new tires, and the old tires are to be k..
|
Correlation regression and multiple regression analysis
: What is the purpose of using correlation, regression and multiple regression analysis? How may these techniques be used in business decisions or in relation to strategy formulation and implementation? Please provide examples to show your reasoning.
|
Select an article and write a one full page summary
: Select an article and write a one full page summary of the article and how it relates to macroeconomics.
|
Write a program that will check a sequence
: Using the dictionary of four letter words write a program that will check a sequence of 4 characters entered from the keyboard to determine if it is a word.
|
Prepare a schedule of expected cash collections for april
: The president of the retailer Prime Products has just approached the company's bank with a request for a $30,000, 90-day loan. Prepare a schedule of expected cash collections for April, May, and June, and for the three months in total
|
How to develop a class named stock tracker
: How to develop a class named stock tracker that takes the definitions: The constructor "StockTracker ()" creates an initially empty StockTracker object buy(quanity, price) method performs a purchase transaction.
|
What is the marginal profit and total profit of a wage
: What is the marginal profit and total profit of a wage that is equal to $80 and an output that is equal to $3?- provide with the MRP-W labor market diagram
|
Determine the flow rate of water from the canal to the river
: The average vertical and horizontal hydraulic conductivities are 1.5 × 10-5 cm/s and 15 × 10-5 cm/s, respectively. Assuming a 1-m length of canal, determine the flow rate of water from the canal to the river.
|
Find the average length of the strings in the vector
: Write a C++ function: Here is the function you should implement:
|