The Oxford Company has budgeted sales revenues as follows. April May June Credit sales $60,000 $48,000 $36,000 Cash sales 36,000 102,000 78,000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on credit, with 60% paid in the month of purchase and 40% in the month following purchase. Budgeted inventory purchases are $130,000 in April, $90,000 in May, and $42,000 in June. Other budgeted cash receipts include (a) the sale of plant assets for $24,700 in May and (b) the sale of new common stock for $33,700 in June. Other budgeted cash disbursements include (a) operating expenses of $13,500 each month, (b) selling and administrative expenses of $25,000 each month, (c) dividends of $38,000 to be paid in May, and (d) purchase of equipment for $12,000 cash in June. The company has a cash balance of $20,000 at the beginning of June and wishes to maintain a minimum cash balance of $20,000 at the end of each month. An open line of credit is available at the bank and carries an annual interest rate of 12%. Assume that all borrowing is done on the first day of the month in which financing is needed and that all repayments are made on the last day of the month in which excess cash is available. Also assume that $7,000 of financing was obtained on May 1. Requirements: Use this information to prepare a schedule of expected cash payments for purchases of inventory for the months of May and June only. (Points : 30),I need the answer by 830 pm tonight,If it can not be answered, let me know now please,Will it be done by 8:30? Please let me know.
Paper#2660 | Written in 18-Jul-2015Price : $25