Budgets Assignment 2
The actual sales and purchases for FILOART, Inc., for September and October 2015, along
with its forecast sales and purchases for the period November 2015 through April 2016,
follow.
The firm makes 20% of all sales for cash and collects on 40% of its sales in each of the 2
months following the sale. Other cash inflows are expected to be €12.000 in September and
April, €15.000 in January and March, and €27.000 in February. The firm pays cash for the
10% of its purchases. It pays for 50% of its purchases in the following month and for 40% of
its purchases 2 months later.
Wages and salaries amount to 20% of the preceding month’s sales. Rent of €20.000 per
month must be paid. Interest payments of €10.000 are due in January and April. A principal
payment of €30.000 is also due in April. The firm expects to pay cash dividends of €20.000 in
January and April. Taxes of €80.000 are due in April. The firm also intends to make a €25.000
cash purchase of fixed assets in December.
Required
Assuming that the firm has a cash balance of €22.000 at the beginning of November,
determine the end-of-month cash balance for each month, November through April.
The actual sales and purchases for FILOART, Inc., for September and October 2015, along
with its forecast sales and purchases for the period November 2015 through April 2016,
follow.
The firm makes 20% of all sales for cash and collects on 40% of its sales in each of the 2
months following the sale. Other cash inflows are expected to be €12.000 in September and
April, €15.000 in January and March, and €27.000 in February. The firm pays cash for the
10% of its purchases. It pays for 50% of its purchases in the following month and for 40% of
its purchases 2 months later.
Wages and salaries amount to 20% of the preceding month’s sales. Rent of €20.000 per
month must be paid. Interest payments of €10.000 are due in January and April. A principal
payment of €30.000 is also due in April. The firm expects to pay cash dividends of €20.000 in
January and April. Taxes of €80.000 are due in April. The firm also intends to make a €25.000
cash purchase of fixed assets in December.
Required
Assuming that the firm has a cash balance of €22.000 at the beginning of November,
determine the end-of-month cash balance for each month, November through April.
