The Amber Magick Shoppe has forecast its sales revenues and purchases for the last 5 months of 20X5 to be as follows:
Sixty percent of sales are on credit. On the basis of past experience, 50% of the accounts receivable are collected the month after the sale and the remainder are collected 2 months after the sale. Purchases are paid 30 days after they are incurred. The firm has a cash balance of $5,000 on hand as of October 31, but its minimum required cash balance is $4,000

Question

The Amber Magick Shoppe has forecast its sales revenues and purchases for the last 5 months of 20X5 to be as follows:
  Sixty percent of sales are on credit. On the basis of past experience, 50% of the accounts receivable are collected the month after the sale and the remainder are collected 2 months after the sale. Purchases are paid 30 days after they are incurred. The firm has a cash balance of $5,000 on hand as of October 31, but its minimum required cash balance is $4,000

Quizplus · Accepted Answer

The Answer of The Amber Magick Shoppe has forecast its sales revenues and purchases for the last 5 months of 20X5 to be as follows:
  Sixty percent of sales are on credit. On the basis of past experience, 50% of the accounts receivable are collected the month after the sale and the remainder are collected 2 months after the sale. Purchases are paid 30 days after they are incurred. The firm has a cash balance of $5,000 on hand as of October 31, but its minimum required cash balance is $4,000

The Amber Magick Shoppe Has Forecast Its Sales Revenues and Purchases