Solution-What is spicer budgeted cash balance at the ends

What is spicer budgeted cash balance at the ends of march

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Reference no: EM132970002

On March 1 of the current year, Spicer Corporation compiled information to prepare cash budget for March, April, and May. All of the company's sales are made on account.

The following information has been provided by Spicer's management.

Month Credit Sales
January $300,000 (actual)
February $400,000 (actual)
March $509,000 (estimated)
April $558,000 (estimated)
May $800,000 (estimated)

The company's collection activity on credit sales historically has been as follows.

Collections in the month of the sale 50%
Collections one month after the sale 30%
Collections two months after the sale 15%
Uncollectible accounts 5%

Spicer's total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 per month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter.

Problem 1: What is Spicer's budgeted cash balance at the ends of March, April, and May?

Reference no: EM132970002

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What is spicer budgeted cash balance at the ends of march

Reference no: EM132970002

Reference no: EM132970002

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