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$2$

Graham Potato Company has projected sales of $$12,000$ in September, $$15,000$ in October, $$22,000$ in November, and $$18,000$ in December. Of the company's sales, $30$ percent are paid for by cash and $70$ percent are sold on credit. Experience shows that $40$ percent of the accounts receivable are paid in the month after the sale, while the remaining $60$ percent are paid two months after. Determine collections for November and December.

Also assume the company's cash payments for November and December are $$18,500$ and $$11,000,$ respectively. The beginning cash balance in November is $$5,000,$ which is the desired minimum balance.

Prepare a cash budget with borrowing needed or repayments for November and December. $($You will need to prepare a cash receipts schedule first$).$

Solution

Problem $4-24$

Instructions

Enter cell references, data, and formulas to complete the cash receipts schedule and the cash budget.

Graham Potato Company

Cash Receipts Schedule

$\backslash$table$[[,$September,October,November,December$],[$Sales$,$$$12,000,$$$15,000,$$$22,000,$$$18,000$