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.
Ch. 21: Questions 4 & 7( Questions and Problems section) 4. Using Spot and Forward Exchange Rates [ LO1 ] Suppose the spot exchange rate for the Canadian dollar is Can $ 1.09 and the six-month forward rate is Can $ 1.11. a. Which is worth more, a U. S. dollar or a Canadian dollar? b. Assuming absolute PPP holds, what is the cost in the United States of an Elkhead beer if the price in Canada is Can $ 2.50? Why might the beer actually sell at a different price in the United States?