November December January February MarchSales $9,500 $10,000 $11,000 $12,100 $13,310All sales are for credit, with 80% collected the following month and 20% collected duringthe second month. Purchases of raw materials equals 60% of sales. Purchases aremade in the month of the sale, but suppliers are paid in the month following thepurchase. Wages are $1,000 per month, rent is $1,500, taxes are $500, and a $1,000loan payment is due in February. Monthly interest expense is $200. What are the netcash flows in January, February, and March?

The objective of the question is to calculate the net cash flows for the months of January,…

Answered: November December January February…

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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Pierce Ltd. specializes in the manufacture of dry cider. The one litre bottle sells for GH(13.00 each. with 25% of sales on cash terms and 75% on one month's credit. The budget shows the following sales volumes. Month Litres August 400.000 September 340.000 October 300.000 November 260.000 December 320.000 January 250.000 The company’s police is for opening inventory of cider to equal one-fifth of each month's sales, but the inventory of cider on 1 September was actually 80.000 litres, For inventories of apples, the policy is for opening inventory to equal 50% of each month's usage. On 1 September, the inventory of apples was actually 2.200 tonnes. On average. 15 kilogrammes of apples are needed to produce l litre of cider 11 tonne= l.000 kg). The cost price of apples is GHc50 tonne in September and October but GH l50 tonne in…
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