f . Payments to suppliers are accelerated . 11 . Calculating the Cash Budget [ LO3 ] Here are some important figures from the budget of Nashville Nougats , Inc ., for the second quarter of 2015 :
The company predicts that 5 percent of its credit sales will never be collected , 35 percent of its sales will be collected in the month of the sale , and the remaining 60 percent will be collected in the following month . Credit purchases will be paid in the month following the purchase .
In March 2015 , credit sales were $ 235,000 and credit purchases were $ 161,300 . Using this information , complete the following cash budget :
Ch . 20 : Questions 8 & 14 ( Questions and Problems section )
8 . Size of Accounts Receivable [ LO1 ] The Arizona Bay Corporation sells on credit terms of net 30 . Its accounts are , on average , four days past due . If annual credit sales are $ 9.75 million , what is the company ’ s balance sheet amount in accounts receivable ?
14 . Credit Policy Evaluation [ LO2 ] The Snedecker Corporation is considering a change in its cash-only policy . The new terms would be net one period . Based on the following information , determine if the company should proceed or not . Therequired return is 2.5 percent per period .