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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.
Annual property taxes are $14,000 and are paid semi annually in June
and October.
A $10,000 cash capital purchase will be made in
April.
The beginning cash balance in April is expected to be $47,000. The Hale
Company has a policy of maintaining a minimum cash balance of
$45,000. The company has an arrangement with a local bank for a line
of credit that carries a 10% annual interest rate. If the ending monthly