REVIEWER Company Bs sales of gizmos are 25% for cash and 75% on credit. Past...
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Accounting
REVIEWER
Company Bs sales of gizmos are 25% for cash and 75% on credit. Past collection history indicates that credit sale are collected as follows: 30% in the month of sale 60% in the month following sale 10% in the second month following sale In January, sales were $42,000 and February sales were $45,000. Projected sales for March are 3,000 gizmos at $10 each. Projected sales for April are 4,500 gizmos at $12 each. The cash balance at March 1 was $5,785. Company B expects to purchase $24,000 of materials in February and $21,000 of materials in March. Three quarters of all purchases are paid for in the month of purchase, and the other one fourth are paid for in the month following the month of purchase. In addition, a 2% discount is allowed for payments made in the month of purchase. All other fixed expenses are $7,000 per month and are paid in the month of purchase. Requirement: Prepare a cash budget for March.
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