8) Using the information below, calculate Party Time Inc.\'s cash payments for r

Question

8) Using the information below, calculate Party Time Inc.'s cash payments for raw materials for January and February of the raw materials to be purchased in Q1, 25,024 gold coins are to be purchased in January and 22,000 in February. Party Time Inc.'s supplier allows the firm to pay for 45% in the month of purchase and the remaining balance in the month following the purchase. Assume that there were $3,500 of accounts payable from last year's purchases of gold coins that will be paid in January Jan. Feb. Total Cash Receipts Cash Collected) 9) Looking ahead, assume the following for April & May... Total expenses (including RM cash purchases) are expected to be $19,000 in April and $12,000 in May. Total expenses include $1,500 of depreciation expense each month, while all other expenses included are paid in cash. The firm wishes to maintain a minimum cash balance of $20,000 each month in the coming year. Party Time borrows from its bank in increments of $2,500 in order to maintain its desired cash balance, and no interest is charged if a loan is repaid within one month. Calculate the ending cash balance for January and February using this information. April May Beginning Cash Balance $20,000 Cash Collections Total Cash Payments $15,100 $17,200 Balance before financing Amount Borrowed or Repaid Ending Cash Balance Activate Win Go to Settings to

Explanation / Answer

8.

Jan Feb Mar Purchase 25024 22000 C Current month pay 45% 11260.8 9900 L Last months due 55% 3500 13763.2 12100 T = C+L Total payable 14760.8 23663.2 12100

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