Vertical Ladder Company (VLC) forecasts its sales for January through April will be $60,000, $70,000, $100,000, and $90,000, respectively. All sales are made on credit, and it is expected that 20 percent of sales will be collected in the month of the sale and the remainder will be collected the month following the sale. Customers who pay in the month of the sale will take the 4 percent cash discount VLC offers for paying early. VLC normally purchases and pays for raw materials, which cost 60 percent of sales, one month prior to selling the finished products. Employees' wages represent 30 percent of sales and rent is $4,000 per month. At the beginning of February, VLC expects to have $6,000 in cash, which is $2,000 greater than its target cash balance. Using the information provided, construct VLC's cash budget for February and March. Round your answers to the nearest dollar. Use a minus sign to enter a negative value, if any. If your answer is zero, enter "0".       February   March Sales   $    $    Cash Receipts:         Sales in month of sale   $     $   Sales one month after sale         Total cash receipts   $     $     Cash Disbursements:         Raw materials   $     $   Wages         Rent         Total cash disbursements   $     $     Net cash flow   $     $   Beginning cash balance         Ending cash balance   $     $   Target cash balance         Surplus (Shortfall)   $     $

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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Vertical Ladder Company (VLC) forecasts its sales for January through April will be $60,000, $70,000, $100,000, and $90,000, respectively. All sales are made on credit, and it is expected that 20 percent of sales will be collected in the month of the sale and the remainder will be collected the month following the sale. Customers who pay in the month of the sale will take the 4 percent cash discount VLC offers for paying early. VLC normally purchases and pays for raw materials, which cost 60 percent of sales, one month prior to selling the finished products. Employees' wages represent 30 percent of sales and rent is $4,000 per month. At the beginning of February, VLC expects to have $6,000 in cash, which is $2,000 greater than its target cash balance. Using the information provided, construct VLC's cash budget for February and March. Round your answers to the nearest dollar. Use a minus sign to enter a negative value, if any. If your answer is zero, enter "0".

 

    February   March
Sales    
 
Cash Receipts:        
Sales in month of sale   $     $  
Sales one month after sale        
Total cash receipts   $     $  
 
Cash Disbursements:        
Raw materials   $     $  
Wages        
Rent        
Total cash disbursements   $     $  
 
Net cash flow   $     $  
Beginning cash balance        
Ending cash balance   $     $  
Target cash balance        
Surplus (Shortfall)   $     $  
 

 

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