Zinc Company’s management team is preparing a cash budget for the coming quarter. They have prepared the following budgeted information for the first quarter:

The company expects to collect 60% of its monthly sales in the month of sale and 40% in the following month. Seventy percent of inventory purchases are paid in the month of purchase and the other 30% in the following month. All payments for other expenses are made in the month incurred. Zinc forecasts the following account balances at the beginning of the quarter:

Given the above information, what is the projected change in cash during the coming quarter?

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Revenue Inventory purchases Other expenses January February March $750,000 $900,000 $1,050,000 600,000 750,000 825,000 300,000 337,500 337,500 Revenue Inventory purchases Other expenses January February March $750,000 $900,000 $1,050,000 600,000 750,000 825,000 300,000 337,500 337,500

Answer rating: 100% (QA)

To calculate the projected change in cash during the coming quarter for Zinc Company well need to consider the cash inflows from revenue collection an... View the full answer