Reference no: EM132952797

Below is the sales forecast, in dollars, for the upcoming year for Houseware Store. Houseware store collects 15% of each month's sales in cash, 49% one month later, and 32% the second month after the sale. 4% of sales are bad debt. A given month's purchases are 60% of the forecasted sales amount for that month and 15% of the previous months sales forecast( ¼ of materials are bought for cash, the other ¾ are paid on "net 30 terms"). The other cash flows for JUNE through AUGUST are $35 interest income to be received in JUNE, a principal repayment of $30 in JULY, interest payment of $50 in JUNE, tax payments of $80 in AUGUST, cash proceeds from asset sale of $65 in AUGUST, and payment for asset acquisitions of $45 in JULY. The company's policy mandates that a minimum of $150 be kept in cash at all times. Ending cash in MAY is projected to be $215, and the company has no outstanding short-term borrowing or investments at that time.

Month
Sales Forecast
January $45
Feb. 48
Mar. 50
Apr. 52
May 63
Jun. 59
July 76
Aug. 83

Based on this information, prepare cash forecast for JUNE through AUGUST using the cash receipts and disbursements method. (Keep 2 decimal digits)

Interpret your forecast. State the maximum funds available to be invested over this period, and the maximum funds needed to be borrowed.