Kamal Co. has an average collection period (ACP) of 30 days and an operating cycle of 170 days. It has a policy of keeping at least RO 15,000 on hand as a minimum cash balance, and has a beginning cash balance for the first quarter of RO 20,000. Beginning receivables for the first quarter amount to RO 30,000 Sales for the first second and the third quarters are expected respectively to be RO 100,000; RO120,000; and RO 150,000. The purchases amount represents 50% of the next quarter's forecasted sales. The quarterly wages and other expenses is RO 7,000. The capital spending occurs in the second quarter and equals to RO 15,000. The accounts payable period is 45 days. The beginning accounts payable is RO 10,000. A. What are cash collections in the first and second quarters? B. What are cash disbursements for the first and second quarters ? C. What is the cumulative surplus (deficit) at the end of the first and second quarters ?

Kamal Co. has an average collection period (ACP) of 30 days and an operating cycle of 170 days. It has a policy of keeping at least RO 15,000 on hand as a minimum cash balance, and has a beginning cash balance for the first quarter of RO 20,000. Beginning receivables for the first quarter amount to RO 30,000 Sales for the first second and the third quarters are expected respectively to be RO 100,000; RO120,000; and RO 150,000. The purchases amount represents 50% of the next quarter's forecasted sales. The quarterly wages and other expenses is RO 7,000. The capital spending occurs in the second quarter and equals to RO 15,000. The accounts payable period is 45 days. The beginning accounts payable is RO 10,000. A. What are cash collections in the first and second quarters? B. What are cash disbursements for the first and second quarters ? C. What is the cumulative surplus (deficit) at the end of the first and second quarters ?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P

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