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cash is expected to be generated from customers

cash is expected to be generated from customers

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company's financial statements are as follows: Profit and loss 1/1-09-31/12-09 Sales Variable costs (COGS) Fixed costs Profit Dividend Fixed assets Current assets 1000 Total 300 100 Balance sheet 31/12-09 600 200 1000 500 1500 Equity Total liabilities Total 800 700 1500 For the budget for 2010 the company is expecting sales to increase by 20%. Variable costs will also increase by 20%. Fixed costs are unchanged, and include a depreciation charge of 50. The company will pay the 2009 dividend in 2010. The same dividend (200) is expected in 2010, which will be paid in 2011. All trade creditors are paid in cash, but customers are invoiced. The company expects inventory to increase from 100 to 200. The company gives customers 1 months credit. Debtors at 31/12-09 were 70. Cash was 330 on 1/1-09. Any unused cash is deposited in the company's bank account. The company pays no tax. How much cash is expected to be generated from customers during 2010?
Transcribed Image Text:A company's financial statements are as follows: Profit and loss 1/1-09-31/12-09 Sales Variable costs (COGS) Fixed costs Profit Dividend Fixed assets Current assets 1000 Total 300 100 Balance sheet 31/12-09 600 200 1000 500 1500 Equity Total liabilities Total 800 700 1500 For the budget for 2010 the company is expecting sales to increase by 20%. Variable costs will also increase by 20%. Fixed costs are unchanged, and include a depreciation charge of 50. The company will pay the 2009 dividend in 2010. The same dividend (200) is expected in 2010, which will be paid in 2011. All trade creditors are paid in cash, but customers are invoiced. The company expects inventory to increase from 100 to 200. The company gives customers 1 months credit. Debtors at 31/12-09 were 70. Cash was 330 on 1/1-09. Any unused cash is deposited in the company's bank account. The company pays no tax. How much cash is expected to be generated from customers during 2010?
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