Consider the following third-quarter budget data for TAP & Brothers: TAP & Brothers Third-Quarter Budget Data July Augus
Posted: Sat May 07, 2022 8:24 pm
Consider the following third-quarter budget data for TAP &
Brothers:
TAP & Brothers Third-Quarter Budget
Data
July
August
September
Credit Sales
256,167
262,962
282,872
Credit Purchases
97,465
111,565
137,292
Wages, Taxes, and Expenses
26,506
31,621
33,707
Interest
7,239
7,773
8,091
Equipment Purchases
54,832
61,271
0
The company predicts that 4% of its credit sales will never be
collected, 30% of its sales will be collected in the month of the
sale, and the remaining 66% will be collected in the following
month. Credit purchases will be paid in the month following the
purchase.
If TAP maintains a policy of always keeping a minimum cash
balance of $75,000 as a buffer against uncertainty and forecasting
errors, what is the cash surplus/deficit at the end of the quarter
(i.e., end of September)?
Brothers:
TAP & Brothers Third-Quarter Budget
Data
July
August
September
Credit Sales
256,167
262,962
282,872
Credit Purchases
97,465
111,565
137,292
Wages, Taxes, and Expenses
26,506
31,621
33,707
Interest
7,239
7,773
8,091
Equipment Purchases
54,832
61,271
0
The company predicts that 4% of its credit sales will never be
collected, 30% of its sales will be collected in the month of the
sale, and the remaining 66% will be collected in the following
month. Credit purchases will be paid in the month following the
purchase.
If TAP maintains a policy of always keeping a minimum cash
balance of $75,000 as a buffer against uncertainty and forecasting
errors, what is the cash surplus/deficit at the end of the quarter
(i.e., end of September)?