The Excel file provides the sales forecast. Collections estimates were obtained from the accounts receivable department and
Question:
The Excel file provides the sales forecast. Collections estimates were obtained from the
accounts receivable department and are listed below. Organa does not offer discounts for early
payment. Additionally, you will note that the collection rates only sum to This is because
of the sales are never collection bad debt
collected in the month of the sale
collected in the month following the sale
collected in the second month following the sale.
The Excel files provides the estimates for raw materials purchases and labor costs. Payments
for the raw materials and labor are typically made in the month following the purchase ie
onemonth lag
Requirements:
Prepare a monthly cash budget for January through April. Be sure to clearly show the
surplus deficit of cash each month.
Based on the deficit cash shown on your cash budget if you have one what is the
dollar amount that Organa should have for a line of credit over this month period?
Note: dont add a cushion just base this amount off of the cash budget.
Auditing A Risk Based Approach to Conducting a Quality Audit
ISBN: 978-1305080577
10th edition
Authors: Karla Johnstone, Audrey Gramling, Larry E. Rittenberg