16.

J. Lo's Clothiers has forecast credit sales for the fourth quarter of the year as:

Schedule of cash receipts (LO2)

Experience has shown that 30 percent of sales are collected in the month of sale, 60 percent in the following month, and 10 percent are never collected.

Prepare a schedule of cash receipts for J. Lo's Clothiers covering the fourth quarter (October through December).

19.

The Elliot Corporation has forecast the following sales for the first seven months of the year:

Schedule of cash payments (LO2)

Monthly material purchases are set equal to 20 percent of forecasted sales for the next month. Of the total material costs, 40 percent are paid in the month of purchase and 60 percent in the following month. Labor costs will run $6,000 per month, and fixed overhead is $3,000 per month. Interest payments on the debt will be $4,500 for both March and June. Finally, Elliot's salesforce will receive a 3 percent commission on total sales for the first six months of the year, to be paid on June 30.

Prepare a monthly summary of cash payments for the six-month period from January through June. (Note: Compute prior December purchases to help get total material payments for January.)

25.

Carter Paint Company has plants in nine midwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales.

Percent-of-sales method (LO3)

Carter Paint has an aftertax profit margin of 5 percent and a dividend payout ratio of 30 percent.

If sales grow by 10 percent next year, determine how many dollars of new funds are needed to finance the expansion. (Assume Carter Paint is already using assets at full capacity and that plant must be added.)