Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Chapter 4, Problem 24P
Graham Potato Company has projected sales of
Experience shows that 40 percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after. Determine collections for November and December.
Also assume Graham’s cash payments for November and December are
Prepare a cash budget with borrowing needed or repayments for November and December. (You will need to prepare a cash receipts schedule first.)
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Graham Potato Company has projected sales of $16,200 in September, $18,500 in October, $26,200 in November, and $22,200 in
December. Of the company's sales, 25 percent are paid for by cash and 75 percent are sold on credit. Experience shows that 40
percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after.
Determine collections for November and December.
Also assume Graham's cash payments for November and December are $22,000 and $14,500, respectively. The beginning cash
balance in November is $5,000, which is the desired minimum balance.
a. Prepare a cash receipts schedule for November and December.
Sales
Credit sales
Cash sales
One month after sale
Two months after sale
Total cash receipts
Graham Potato Company
Cash Receipts Schedule
September October
November
$
$
December
6,550
$
19,650
6,550 $
$
22,200
16,650
5,550
5,550
Ind
Graham Potato Company has projected sales of $12,000 in September, $15,000 in October, $22,000 in November, and $18,000 in
December. Of the company's sales, 30 percent are paid for by cash and 70 percent are sold on credit. Experience shows that 40
percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after.
Determine collections for November and December.
Also assume Graham's cash payments for November and December are $18,500 and $11,000, respectively. The beginning cash
balance in November is $5,000, which is the desired minimum balance.
a. Prepare a cash receipts schedule for November and December.
Graham Potato Company
Cash Receipts Schedule
Sales
Credit sales
Cash sales
One month after sale
Two months after sale
Total cash receipts
September
October
November
December
Chapter 4 Solutions
Foundations of Financial Management
Ch. 4 - What are the basic benefits and purposes of...Ch. 4 - Explain how the collections and purchases...Ch. 4 - With inflation, what are the implications of using...Ch. 4 - Explain the relationship between inventory...Ch. 4 - Prob. 5DQCh. 4 - Discuss the advantage and disadvantage of level...Ch. 4 - What conditions would help make a percent-of-sales...Ch. 4 - Prob. 1PCh. 4 - Philip Morris expects the sales for his clothing...Ch. 4 - Galehouse Gas Stations Inc. expects sales to...
Ch. 4 - The Alliance Corp. expects to sell the following...Ch. 4 - Prob. 5PCh. 4 - Cyber Security Systems had sales of 3,500 units at...Ch. 4 - Dodge Ball Bearings had sales of 15,000 units at...Ch. 4 - Sales for Ross Pro’s Sports Equipment are expected...Ch. 4 - Vitale Hair Spray had sales of 13,000 units in...Ch. 4 - Delsing Plumbing Company has beginning inventory...Ch. 4 - On December 31 of last year, Wolfson Corporation...Ch. 4 - At the end of January, Higgins Data Systems had an...Ch. 4 - At the end of January, Mineral Labs had an...Ch. 4 - Convex Mechanical Supplies produces a product with...Ch. 4 - The Bradley Corporation produces a product with...Ch. 4 - Sprint Shoes Inc. had a beginning inventory of...Ch. 4 - J. Lo’s Clothiers has forecast credit sales for...Ch. 4 - Simpson Glove Company has made the following sales...Ch. 4 - Watt’s Lighting Stores made the following sales...Ch. 4 - Ultravision Inc. anticipates sales of $290,000...Ch. 4 - The Denver Corporation has forecast the following...Ch. 4 - Wright Lighting Fixtures forecasts its sales in...Ch. 4 - The Volt Battery Company has forecast its sales in...Ch. 4 - Graham Potato Company has projected sales of...Ch. 4 - Harry’s Carryout Stores has eight locations. The...Ch. 4 - Archer Electronics Company’s actual sales and...Ch. 4 - Prob. 27PCh. 4 - The Manning Company has financial statements as...Ch. 4 - Conn Man’s Shops, a national clothing chain, had...
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- Graham Potato Company has projected sales of $10,200 in September, $13,500 in October, $20,200 in November, and $16.200 in December of the company's sales, 30 percent are paid for by cash and 70 percent are sold on credit Experience shows that 40 percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after. Determine collections for November and December Also assume Graham's cash payments for November and December are $17,000 and $9,500, respectively. The beginni cash balance in November is $5.000, which is the desired minimum balance. a. Prepare a cash receipts schedule for November and December Sales Credt sales Cash sales One month after sale Two months after sale Total cash receipts Graham Potato Company Cash Receipts Schedule September October November S December $arrow_forwardGrahm Potato company has a projected sales of $13,200 in September, $16,000 in October, $23,200 in November, and $19,200 in December. Of the company's sales, 25 percent are paod for by cash and 75 percent are sold on credit. Expereice shows that 40 percent of accounts recievable are paid in the month after the sale, while the remaining 60 percent are paod two months after. Determine collections for November and December.arrow_forwardWorton Distributing expects its September sales to be 25% higher than its August sales of $154,000. Purchases were $104,000 in August and are expected to be $124,000 in September. All sales are on credit and are expected to be collected as follows: 30% in the month of the sale and 70% in the following month. Purchases are paid 25% in the month of purchase and 75% in the following month. The cash balance on September 1 is $14,000. The ending cash balance on September 30 is estimated to be:arrow_forward
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