d. Cash Receipts January February March December receivables P32,000 From January sales 54,000 P36,000 From February sales 66,000 P44,000 From March sales 72,000 Other information includes the following.
d. Cash Receipts January February March December receivables P32,000 From January sales 54,000 P36,000 From February sales 66,000 P44,000 From March sales 72,000 Other information includes the following.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Use the following information for items 7 and 8Tidwell Corporation sells a single product for P20 per unit. All sales are on account, with 60% collected in the month of sale and 40% collected in the following month. A partial schedule of cash collections for January through March of the coming year reveals the following receipts for the period.
Cash Receipts
January February March
December receivables P32,000
From January sales 54,000 P36,000
From February sales 66,000 P44,000
From March sales 72,000
Other information includes the following.
• Inventories are maintained at 30% of the following month’s sales.
• Tidwell desires to keep a minimum cash balance of P15,000. Total payments in January are expected to be P106,500, which excludes P12,000 ofdepreciation expense. Any required borrowings are in multiples of P1,000.
• The December 31 balance sheet for the preceding year revealed a cash balance of P24,900.
January February March
December receivables P32,000
From January sales 54,000 P36,000
From February sales 66,000 P44,000
From March sales 72,000
Other information includes the following.
• Inventories are maintained at 30% of the following month’s sales.
• Tidwell desires to keep a minimum cash balance of P15,000. Total payments in January are expected to be P106,500, which excludes P12,000 of
• The December 31 balance sheet for the preceding year revealed a cash balance of P24,900.
1. The number of units to be purchased in February is?
2. Ignoring income taxes, the financing needed in January to maintain the firm’s minimum cash balance is?
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