Use the following information to answer questions 27 - 32 Silly Sally, Inc. Silly Sally, Inc. forecasts...

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Finance

Use the following information to answer questions 27 - 32
Silly Sally, Inc.
Silly Sally, Inc. forecasts the following sales levels: January,$420; February, $435; March, $450; and April, $470. Historically,40% of its sales are for cash. Of the remaining sales, 80% arecollected in one month, 15% are collected in the second month,while the rest remain uncollected. November sales were $380 andDecember sales were $500. (all values $000)
Purchases are made at 60% of the next month’s sales forecast,and are paid for in the month of purchase. Other cash outlays are:rent, $10 monthly; wages and salaries, $50 monthly; a tax paymentof $30 in March; an interest payment of $15 in March; and a plannedpurchase of $20 of new fixed assets in January.
27. Refer to Silly Sally, Inc. What is the forecasted amount tobe collected from cash sales in March?
$450
$360
$261
$180
28. Refer to Silly Sally, Inc. What are forecasted total cashcollection for January?
$420
$442
$168
$240
29. Suppose Silly Sally, Inc. forecasts an ending cash balanceof $20, its minimum desired balance, in January. If February’sforecasted cash expenditures are $400, which of the followingdescribes the changes to Silly Sally’s cash balance and level ofborrowing, if any, related to its minimum cash balance, at the endof February?
net cash flows of $21; borrowing will increase $21
net cash flows of $21; borrowing will decrease $21
net cash flows of $11; borrowing will increase $9
net cash flows of $11; borrowing will decrease $9
30. What are Silly Sally’s forecasted cash outflows forFebruary?
a. $270 b. $330 c. $395 d. $450
31. What is Silly Sally’s change in cash for March?
$40 increase in cash
$40 decrease in cash
$85 increase in cash
$20 increase in cash
32. Suppose Silly Sally experiences a change in customer paymentpatterns in accounts receivable, so that payments are now 30% incash, and of the credit sales, 60% are collected in one month, 35%are collected in the second month, with the rest uncollected. Whatis the new forecasted collection for January, and how much is thisdifferent from the original forecast?
$408; $72 higher
$336; $93 lower
$442; $13 higher
$429; $13 lower

Answer & Explanation Solved by verified expert

4.2 Ratings (757 Votes)

Month November December January February March April sales 380 500 420 435 450 470 purchase60 of next month sales 300 252 261 270 282 cash collection cash sales 40 of the month sale 168 174 180 188 collection of credit sales60 of month sales 80 of credit sales in the first month of sales 240 202 209 216 15 of credit sales in the second month of See Answer

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Use the following information to answer questions 27 - 32Silly Sally, Inc.Silly Sally, Inc. forecasts the following sales levels: January,$420; February, $435; March, $450; and April, $470. Historically,40% of its sales are for cash. Of the remaining sales, 80% arecollected in one month, 15% are collected in the second month,while the rest remain uncollected. November sales were $380 andDecember sales were $500. (all values $000)Purchases are made at 60% of the next month’s sales forecast,and are paid for in the month of purchase. Other cash outlays are:rent, $10 monthly; wages and salaries, $50 monthly; a tax paymentof $30 in March; an interest payment of $15 in March; and a plannedpurchase of $20 of new fixed assets in January.27. Refer to Silly Sally, Inc. What is the forecasted amount tobe collected from cash sales in March?$450$360$261$18028. Refer to Silly Sally, Inc. What are forecasted total cashcollection for January?$420$442$168$24029. Suppose Silly Sally, Inc. forecasts an ending cash balanceof $20, its minimum desired balance, in January. If February’sforecasted cash expenditures are $400, which of the followingdescribes the changes to Silly Sally’s cash balance and level ofborrowing, if any, related to its minimum cash balance, at the endof February?net cash flows of $21; borrowing will increase $21net cash flows of $21; borrowing will decrease $21net cash flows of $11; borrowing will increase $9net cash flows of $11; borrowing will decrease $930. What are Silly Sally’s forecasted cash outflows forFebruary?a. $270 b. $330 c. $395 d. $45031. What is Silly Sally’s change in cash for March?$40 increase in cash$40 decrease in cash$85 increase in cash$20 increase in cash32. Suppose Silly Sally experiences a change in customer paymentpatterns in accounts receivable, so that payments are now 30% incash, and of the credit sales, 60% are collected in one month, 35%are collected in the second month, with the rest uncollected. Whatis the new forecasted collection for January, and how much is thisdifferent from the original forecast?$408; $72 higher$336; $93 lower$442; $13 higher$429; $13 lower