Faces Au Natural Corp., a distributor of natural cosmetics, is ready to begin it
ID: 2504865 • Letter: F
Question
Faces Au Natural Corp., a distributor of natural cosmetics, is ready to begin its third quarter, in which peak sales occur. The company has requested a $52,000, 90-day loan from its bank to help meet cash requirements during the quarter. Because the company has experienced difficulty in paying off its loans in the past, the bank's loan officer has asked the company to prepare a cash budget for the quarter. In response to this request, the following data have been assembled:
Equipment costing $23,000 will be purchased for cash during July.
In preparing the cash budget, assume that the $52,000 loan will be made in July and repaid in September. Interest on the loan will total $1,900.
Prepare a schedule of expected cash collections for July, August, and September and for the quarter in total. (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations.)
Prepare a cash budget, by month and in total, for the third quarter. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Expenses are paid in the month incurred. Do not round intermediate calculations. Total Financing should be indicated with a minus sign when the company is repaying amounts that were previously borrowed. )
Faces Au Natural Corp., a distributor of natural cosmetics, is ready to begin its third quarter, in which peak sales occur. The company has requested a $52,000, 90-day loan from its bank to help meet cash requirements during the quarter. Because the company has experienced difficulty in paying off its loans in the past, the bank's loan officer has asked the company to prepare a cash budget for the quarter. In response to this request, the following data have been assembled:
Explanation / Answer
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Schedule of Expected Cash Collections July August September Quarter From accounts receivable: May sales 9900 0 0 9900 June sales 188500 8700 0 197200 From budgeted sales: July sales 66000 214500 9900 290400 August sales 0 98000 318500 416500 September sales 0 0 66000 66000 Total cash collections 264400 321200 394400 980000Related Questions
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