Reference no: EM132532371

Required:

Question A) Prepare a schedule of cash receipts for October, November, and December.

Question B) Prepare a cash budget for the same period.

Top Shoppe has forecast its sales revenues and purchases for the last 5 months of 20X5 to be as follows:

                                         Sales                         Purchases

August                       $22,000                  $17,000

September                  15,000                     19,500

October                         25,000               29,000

November                      30,000               20,000

December                     26,000                   24,000

• Sixty percent of sales are on credit. On the basis of past experience, 50% of the accounts receivable are collected the month after the sale and the remainder are collected 2 months after the sale. Purchases are paid 30 days after they are incurred. The firm has a cash balance of $5,000 on hand as of October 31, but its minimum required cash balance is $4,000