Eddie\'s Bar and Restaurant Supplies expects its revenues and payments for the f
ID: 2682092 • Letter: E
Question
Eddie's Bar and Restaurant Supplies expects its revenues and payments for the first part of the year to be:Eighty percent of the firm's sales are on credit. Past experience shows that 40 percent of accounts receivable are collected in the month after sale, and the remainder is collected in the second month after sale. Prepare a schedule of cash receipts for March, April and May. Eddie's pays its payments in the following month. Eddie's had a cash balance of $2,000 on March 1, which is also its minimum required cash balance. There is an outstanding loan of $6,000 on March 1. Prepare a cash budget for March, April, and May.
Explanation / Answer
Jan
feb
March
april
may
Sales
14,000
20,000
26,000
22,000
22,000
Opening balc
2000
2000
3160
Cash inflow
Cash- sale (30%)
4200
6000
7800
6600
5400
70%
3920
5600
7280
6150
605 of 70%
5800
8400
10920
Total
4200
9920
21280
24280
25640
payments
18000
21300
19100
22400
Cash ba
20
5180
3240
Loan a/ccash ba
20000
borrowing
20
Repayment loan
2020
Total cash
2000
3160
3240
Jan
feb
March
april
may
Sales
14,000
20,000
26,000
22,000
22,000
Opening balc
2000
2000
3160
Cash inflow
Cash- sale (30%)
4200
6000
7800
6600
5400
70%
3920
5600
7280
6150
605 of 70%
5800
8400
10920
Total
4200
9920
21280
24280
25640
payments
18000
21300
19100
22400
Cash ba
20
5180
3240
Loan a/ccash ba
20000
borrowing
20
Repayment loan
2020
Total cash
2000
3160
3240
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