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ACCT 556
Week 5 Problem
Cash Budget
Note: It is expected that this problem will be complete using an Excel
spreadsheet using formulas. Please see the Excel Tutorial that is
available under the course home tab.
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