Dai Hing Bookshop Ltd. has a beginning cash balance of $44,000 on November 1. The firm has projected sales of $61,000 in October, $68,000 in November, and $74,000 in December. The cost of goods sold is equal to 60 percent of sales. Goods are purchased one month prior to the month of sale and there is no ending inventory requirement. The accounts payable period is 30 days and the accounts receivable period is 15 days. The firm has monthly cash expenses of $16,000. What is the projected ending cash balance at the end of November and December? Assume every month has 30 days.

Dai Hing Bookshop Ltd. has a beginning cash balance of $44,000 on November 1. The firm has projected sales of $61,000 in October, $68,000 in November, and $74,000 in December. The cost of goods sold is equal to 60 percent of sales. Goods are purchased one month prior to the month of sale and there is no ending inventory requirement. The accounts payable period is 30 days and the accounts receivable period is 15 days. The firm has monthly cash expenses of $16,000. What is the projected ending cash balance at the end of November and December? Assume every month has 30 days.

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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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Dai Hing Bookshop Ltd. has a beginning cash balance of $44,000 on November 1. The firm has
projected sales of $61,000 in October, $68,000 in November, and $74,000 in December.
The cost of goods sold is equal to 60 percent of sales.
Goods are purchased one month prior to the month of sale and there is no ending inventory
requirement.
The accounts payable period is 30 days and the accounts receivable period is 15 days.
The firm has monthly cash expenses of $16,000.
What is the projected ending cash balance at the end of November and December? Assume every
month has 30 days.

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