70.2K

Verified Solution

Link Copied!

You are alsc $$

page analysis of the results of your cash budget.

Middletown Construction, Inc. has estimated the following sales forecast over the next $12$ months $($they close in the winter$)$:JanuarySOFebrua

$$275,000$ May $$312,000$ June $$417,000$ July $$714,000$ August $$611,000$ September $$827,000$ October $$500,000$ November $$116,000$ December $$0$ Th

the following collection estimates regarding the forecast sales:

Payment collection within the month of sale $=20\%$

Payment collection the month following sales $=60\%$

Payment collection the second month following sales $=20\%$

PAID IN MONTH AFTER!!!

Payments for raw materials and labor costs are paid the month after the purchase and are estimated as follows:March $$220,000$ April$ $240,0$

$7,000$July $$350,000$ August $$415,000$ September $$242,000$ Ctober $$214,000$ November $$222,000$ Additional financial information is as follows:

Administrative salaries will approximately amount to $$30,000$ a month.

Lease payments are around $$10,000$ a month.

A one$-$time new plant investment for $$23,000$ is expected to incur and be paid in June$-$

Income tax payments estimated to be around $$50\mathrm{.}000$ will be due in both June and September.

Miscellaneous costs are estimated to be around $$5,000$ a month.

Cash on hand on March $1$ will be around $$50,000,$ and a minimum cash balance of $$50,000$ shall be on hand at all times.

Answer & Explanation Solved by verified expert

See Answer