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Consider the following third-quarter budget data for TAP & Brothers: TAP & Brothers Third-Quarter Budget Data...

Consider the following third-quarter budget data for TAP & Brothers:

TAP & Brothers Third-Quarter Budget Data

July

August

September

Credit Sales

258,079

268,029

281,095

Credit Purchases

97,436

118,919

136,436

Wages, Taxes, and Expenses

26,505

31,848

33,758

Interest

7,182

7,615

7,921

Equipment Purchases

54,184

61,353

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.

  • In June, credit sales were $138,338, and credit purchases were $102,718
  • July’s beginning cash is $184,266

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)?

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jeff jeffy answered 6 months ago
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