Janus Products, Inc., is a merchandising company that sells binders, paper, and

Question

Janus Products, Inc., is a merchandising company that sells binders, paper, and other school supplies. The company is planning its cash needs for the third quarter. In the past, Janus Products has had to borrow money during the third quarter to support peak sales of back-to-school materials, which occur during August. The following information has been assembled to assist in preparing a cash budget for the quarter:

  

Janus Products, Inc., is a merchandising company that sells binders, paper, and other school supplies. The company is planning its cash needs for the third quarter. In the past, Janus Products has had to borrow money during the third quarter to support peak sales of back-to-school materials, which occur during August. The following information has been assembled to assist in preparing a cash budget for the quarter:

Explanation / Answer

Sales                               34,000.00           64,000.00               54,000.00               40,000.00 COGS                               22,000.00           40,000.00               24,000.00               26,000.00 Gross Margin                               12,000.00           24,000.00               30,000.00               14,000.00 Selling Exp                                  5,200.00           10,200.00                 7,200.00                 6,700.00 Adm. Exp(excl. dep)                                  3,000.00              5,000.00                 4,100.00                 3,500.00 Dep                                  1,200.00              1,200.00                 1,200.00                 1,200.00 Total Exp                                  9,400.00           16,400.00               12,500.00               11,400.00 Net Income                                  2,600.00              7,600.00               17,500.00                 2,600.00 Receipts Cash Sales                                  8,500.00           16,000.00               13,500.00               10,000.00 Credit Sales same month Collections                                  2,550.00              4,800.00                 4,050.00                 3,000.00 1months collections                                               -             17,850.00               33,600.00               28,350.00 2months collections                                               -                             -                   5,100.00                 9,600.00 Cash collections from sales                               11,050.00           38,650.00               56,250.00               50,950.00

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