Eastnorth’s suppliers are upset that Eastnorth takes two months to pay its accounts payable; they demand that in the following year Eastnorth pay its bills within 30 days, or one month after purchase.

a. Using this new information, update Eastnorth’s cash outflow forecast shown in Table 15.5.

b. Using the cash inflows given in Table 15.4, construct a revised cash budget for Eastnorth.

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Monthly Cash Outflows, Eastnorth Manufacturing Inc. TABLE 15.5 Nov. Dec. Jan. Feb. Mar. Apr. $80,000 Sales $100,000 $30,000 $40,000 $50,000 $60,000 Materials and supplies purchases (50% of monthly sales) 40,000 50,000 15,000 20,000 25,000 30,000 Payments 100% of purchases of the second previous month 50,000 40,000 15,000 20,000 20,000 Salaries and overhead 20,000 20,000 20,000 7,000 Interest Dividends 6,000 Taxes 3,000 Capital expenditures 50,000 Total cash payments $60,000 $127,000 $44,000 $40,000