The Hale Company is currently working on its cash budget for the
coming year. The following information is
available:
Projected sales for the coming year:
The collection history of the Hale Company has been as
follows:
20% of sales are collected in the month of the sale.
60% of the sales are collected in the month following the
sale.
12% of the sales are collected in the 2nd month following the
sale.
5% of the sales are collected in the 3rd month following the
sale.
The following information regarding costs is
available:
The cost of goods sold is 54% of sales
Items for sale are purchased in the month of the sale.
80% of accounts payable are paid in the month following when the
cost is incurred.
20% of accounts payable are paid in the 2nd month following when
the cost is incurred.
Wages are 28% of sales and are paid currently
Annual general and administrative costs are $1,411,200 and are
incurred evenly throughout the year.