Prepare schedule of cash collections

Assignment Help Financial Management

Reference no: EM131930260

Armidale Innovations operations manager, Henry, prepared the following sales budget for the selected months of 2017:

Month Cash Sales ($) Credit Sales ($)

January 161,000 681,000

February 201,000 801,000

March 181,000 741,000

April 241,000 921,000

May 221,000 761,000

Cash collections history of the company shows that 41% of all credit sales are collected in the month of sale, 46% are collected in the month following the month of sale, and 11% is collected two months following the month of sale. The remaining 2% is uncollectible and treated as ‘bad debts’.

Required: You work under Henry who asks you to prepare a schedule of cash collections for March, April and May, 2017, showing the total for the three months in the ‘total’ column.

Must use the following format/table (show supporting calculations/working separately before or after the format/table):

March April May Total

Cash Sales …………………….

Collections from credit sales: From current month ………..

From previous month ………

From two months back ……..

Total collections (cash & credit):

Reference no: EM131930260

Questions Cloud

What is the cost of equity for the privately held firm : A privately held corporation wishes to estimate its cost of equity. What is the cost of equity for the privately held firm?

Make a purchases budget : Make a ‘purchases budget’ for July, August and September, 2017, showing the total for the three months in the ‘total’ column.

Define strategic default and liquidity default : Briefly explain the intuition of the empty creditor problem. Define strategic default and liquidity default.

Covenant prohibiting the use of special dividends : Suppose a new bond issue includes a covenant prohibiting the use of special dividends.

Prepare schedule of cash collections : You work under Henry who asks you to prepare a schedule of cash collections for March, April and May, 2017,

What is the risk-neutral value of call option : There is a call option on the stock with a strike price of $55 and one year until expiration. what is the risk-neutral value of the call option?

Calculate the project initial time zero cash flow : Calculate the project’s initial Time 0 cash flow, taking into account all side effects.

Journal entries to record amortization expense on intangible : Prepare year-end adjusting journal entries to record amortization expense on the intangibles at December 31, 2016.

Calculate the project present value break-even point : Given the information below for a project being considered by a firm, calculate the project’s present value break-even point

User Account

All Pages