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Q.2 A Rodriques Mountain Climbing, Inc. (RMC) has the following information: Previous Sales: November 2007 130,000 December 2007 125,000 Forecast sales for: January 2008 120,000 February 2008 260,000 March 2008 140,000

Q.2 A Rodriques Mountain Climbing, Inc. (RMC) has the following information: Previous Sales: November 2007 130,000 December 2007 125,000 Forecast sales for: January 2008 120,000 February 2008 260,000 March 2008 140,000

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter21: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 9P: Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year were 4,562,500 and...
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Q.2 A Rodriques Mountain Climbing, Inc. (RMC) has the following information: Previous Sales: November 2007 130,000 December 2007 125,000 Forecast sales for: January 2008 120,000 February 2008 260,000 March 2008 140,000 April 2008 140,000 Collections : 30% of customers pay cash 50% pay in month after sale 20% раy 2 months after sale Other information for RMC Cash Budget: Purchases of inventory are 75% of sales and are made 2 months before sale and are paid for 1 month after delivery Other expenses $14,000 per month Taxes $10,000 due in March Cash Balance (Dec. 31, 2007) = $28,000 Minimum balance required by bank = $25,000 (ST borrowing rate = 6% annually) Prepare a cash budget for the month of January, Feb and March.
Transcribed Image Text:Q.2 A Rodriques Mountain Climbing, Inc. (RMC) has the following information: Previous Sales: November 2007 130,000 December 2007 125,000 Forecast sales for: January 2008 120,000 February 2008 260,000 March 2008 140,000 April 2008 140,000 Collections : 30% of customers pay cash 50% pay in month after sale 20% раy 2 months after sale Other information for RMC Cash Budget: Purchases of inventory are 75% of sales and are made 2 months before sale and are paid for 1 month after delivery Other expenses $14,000 per month Taxes $10,000 due in March Cash Balance (Dec. 31, 2007) = $28,000 Minimum balance required by bank = $25,000 (ST borrowing rate = 6% annually) Prepare a cash budget for the month of January, Feb and March.
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