Question

The following data are from the budget of Ritewell Publishers. Half the company’s sales are transacted on a cash basis. The other half are paid for with a 1-month delay. The company pays all of its credit purchases with a 1-month delay. Credit purchases in January were $140, and total sales in January were $290.

	February				March				April
Total sales	$	420			$	440			$	400
Cash purchases		125				135				115
Credit purchases		95				85				95
Labor and administrative purchases		85				85				85
Taxes, interest, and dividends		65				65				65
Capital expenditures		210				0				0

Complete the following cash budget. (Leave no cells blank. Enter '0' when necessary. Negative amounts should be indicated by a minus sign.)

Answer is complete but not entirely correct.

February March April Sources of cash Collections on current sales $210selected answer correct $220selected answer correct $200selected answer correct Collections on amounts receivable $145selected answer correct $210selected answer correct $220selected answer correct Total sources of cash $355 $430 $420 Uses of cash Payments of accounts payable $140selected answer correct $95selected answer correct $85selected answer correct Cash purchases $125selected answer correct $135selected answer correct $115selected answer correct Labor and administrative expenses $85selected answer correct $85selected answer correct $85selected answer correct Capital expenditures $210selected answer correct $0selected answer correct $0selected answer correct Taxes, interest, and dividends $65selected answer correct $65selected answer correct $65selected answer correct Total uses of cash $625 $380 $350 Net cash inflow $(270)selected answer incorrect $50selected answer correct $70selected answer correct Cash at start of period $210 $(60)selected answer incorrect $(10)selected answer incorrect + Net cash inflow $(270)selected answer correct $50selected answer correct $70selected answer correct = Cash at end of period $(60) $(10) $60 + Minimum operating cash balance $210 $210selected answer correct $210selected answer correct = Cumulative short-term financing required $270 $220 $150

Answer 1