Question

Reproduced below are selected financial data at the end of Year 5 and forecasts for the end of Year 6 for Top Corporation:


Additional forecast estimates for Year 6:
Sales. . . . . . . . . . . . . . . . . . . . $412,500
Net income. . . . . . . . . . . . . . . $10,000
Cost of sales. . . . . . . . . . . . . . 70% of sales forecast
Days’ sales in receivables . . . 90 days

Required:
Assuming all expenses are paid in cash when incurred and that cost of sales is exclusive of depreciation, forecast the ending cash balance for Year 6. If Top Corp. wishes to maintain a minimum cash balance of $50,000, must itborrow?


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  • CreatedJanuary 22, 2015
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