Quality Co requires a minimum cash balance of $25,000 at the end of February of the current
Fantastic news! We've Found the answer you've been seeking!
Question:
Quality Co requires a minimum cash balance of $25,000 at the end of February of the current year. Any required borrowings take place in increments of $1,000 with annual interest of 8%. Repayments of borrowed funds are also made in increments of $1,000. Assume that borrowings are made on the first day of the month in which the cash is required, and that repayments are made on the last day of a month in which excess cash is available. The cash balance at January 31 is $28,000.
Transcribed Image Text:
Actual and projected total sales are as follows: December (prior year actual) $ 90,000 January (actual) $125,000 February (projected) $150,000 March (projected) $ 75,000 Experience shows that of total sales in a given month, 20% will be in cash and 80% will be on account. Experience indicates that the store will collect 60% of credit sales in the month of the sale, 30% in the month following the sale, and 7% in the second month following the sale. The remaining 3% is uncollectible. DairyLand does not give sales discounts for early customer payment. Actual and projected total sales are as follows: December (prior year actual) $ 90,000 January (actual) $125,000 February (projected) $150,000 March (projected) $ 75,000 Experience shows that of total sales in a given month, 20% will be in cash and 80% will be on account. Experience indicates that the store will collect 60% of credit sales in the month of the sale, 30% in the month following the sale, and 7% in the second month following the sale. The remaining 3% is uncollectible. DairyLand does not give sales discounts for early customer payment.
Expert Answer:
Answer rating: 100% (QA)
O Schedule of Ca8h Receipts Februauy cash sales 150000 X 20 30000 Credit sales o... View the full answer
Posted Date:
Students also viewed these accounting questions
-
Harley Company requires a minimum cash balance of $5,000. When the company expects a cash deficiency, it borrows the exact amount required on the first of the month. Expected excess cash is used to...
-
Hoppy Company requires a minimum cash balance of $3,500. When the company expects a cash deficiency, it borrows the exact amount required on the first of the month. Expected excess cash is used to...
-
Consider the real number r = -12.345. Give an upper bound on the absolute relative error and on the absolute error of the floating-point representation fl(r) of this real number r represented in a...
-
Inverse permutation. Write a program that reads in a permutation of the integers 0 to n-1 from n command-line arguments and prints the inverse permutation. (If the permutation is in an array a[], its...
-
Do low tax rates in a foreign country imply that expected after-tax rates of return on marginal investments should be higher than those on domestic investments? Explain.
-
Public opinion is highly influenced by self-interest and events. What are these concepts?
-
DOUG: Now that it looks like we are going to get approval on these two new cancer drugs, we need to get a sales force out there selling them for us and we need to do it quickly. HAROLD: I agree. Weve...
-
A graphical approach was used to solve the following LP model in Problem 2-14: Maximize profit = $4X + $5T Subject to the constraints 20
-
You pay $1,000 to flip a two-sided, fair coin at the local fair. If you flip 'heads', you walk away with $3,000, a return of 200%. However, if you flip 'tails', you walk away with $250, a return of...
-
You have a room that is 4 m long, 7 m wide, and has a ceiling height of 3 m. The floor is hardwood, = .15 at 500 Hz. The walls are gypsum wallboard (GWB), = .30 at 500 Hz. The ceiling is acoustic...
-
Your law firm regularly represents the First Bank of Alberta in its collection's matters. The First Bank has recently contacted you about a new file against TCB Memphis Grille Ltd. ["TCB"], a...
-
Identify some of the main reasons organizations need to make location decisions.
-
Identify the determinants of quality.
-
Explain the benefit of cross-docking.
-
Define the term quality as it relates to products and as it relates to services.
-
What are some of the advantages of e-business?
-
One study of heart disease involved treating male physicians with daily doses of aspirin. Because the study concluded that aspirin helps males avoid heart disease, it follows that females can also...
-
Audrey purchases a riding lawnmower using a 2-year, no-interest deferred payment plan at Lawn Depot for x dollars. There was a down payment of d dollars and a monthly payment of m dollars. Express...
-
Many factors affect the economics of sport. What are some not discussed in the chapter? How do they affect financial management within the industry?
-
What is financial management? How does financial management differ in the sport industry as compared to other industries?
-
Which has the greater impact on financial management: the structure of a league or the structure of a team?
Study smarter with the SolutionInn App