Reference no: EM133094712
Question - AZ Ltd has the following information:
a. The cash balance on March 1, 2022 is 30,000 pound
b. Estimated sales for January, February and March 2022 are:
|
|
Jan. 2022
|
Feb. 2022
|
Mar, 2022
|
|
Credit sales
|
400,000 pound
|
500,000 pound
|
600,000 pound
|
c. Of the credit sales, 40% are collected in the following month, 60% are collected after 2 months.
d. Inventory purchases will total 300.000 pound for February 2022 and 350,000 pound for March 2022. 80% of a month's inventory purchases are paid during the month of purchase, 20% of a month's inventory purchases are paid in the following month.
e. Selling and administrative expenses to be paid at 100,000 pound for March 2022.
f. During March 2022, a new web server for marketing of 50,000 pound will be purchased for cash, and dividends of 70,000 pound will be paid.
Required - Calculate estimated cash receipts, cash payments, ending balance for March 2022 of AZ Ltd. Is there any cash problem for March 2022? Recommend ways to overcome for AZ Ltd?