Grenoble Enterprises had sales of $50,000 in March and $60,300 in April. Forecast sales for​ May, June, and July are $69,700​, $80,300​, and $99,900​, respectively. The firm  has a cash balance of $4,800 on May 1 and wishes to maintain a minimum cash balance of $4,800. Given the following​ data, prepare and interpret a cash budget for the months of​ May, June, and July.   ​(1) The firm makes 16% of sales for​ cash, 60% are collected in the next​ month, and the remaining 24% are collected in the second month following sale.   ​(2) The firm receives other income of $1,500 per month.   ​(3) The​ firm's actual or expected​ purchases, all made for​ cash, are $49,700​, $69,700​, and $79,800 for the months of May through​ July, respectively.   ​(4) Rent is $2,500 per month.   ​(5) Wages and salaries are 8% of the previous​ month's sales.   ​(6) Cash dividends of $3,400 will be paid in June.   ​(7) Payment of principal and interest of $3,900 is due in June.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Grenoble Enterprises had sales of $50,000 in March and $60,300 in April. Forecast sales for​ May, June, and July are $69,700​, $80,300​, and $99,900​, respectively. The firm  has a cash balance of $4,800 on May 1 and wishes to maintain a minimum cash balance of $4,800. Given the following​ data, prepare and interpret a cash budget for the months of​ May, June, and July.
 
​(1) The firm makes 16% of sales for​ cash, 60% are collected in the next​ month, and the remaining 24% are collected in the second month following sale.  
​(2) The firm receives other income of $1,500 per month.  
​(3) The​ firm's actual or expected​ purchases, all made for​ cash, are $49,700​, $69,700​, and $79,800 for the months of May through​ July, respectively.  
​(4) Rent is $2,500 per month.  
​(5) Wages and salaries are 8% of the previous​ month's sales.  
​(6) Cash dividends of $3,400 will be paid in June.  
​(7) Payment of principal and interest of $3,900 is due in June.  
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