The Amber Magick Shoppe has forecast its sales revenues and purchases for the last 5 months of 2005 to be as follows: $\begin{array}{lrr}&\text { Sales } & \text { Purchases } \
\text { August } & \$ 22,000 & \$ 17,000 \
\text { September } & 15,000 & 19,500 \
\text { October } & 25,000 & 29,000 \
\text { November } & 30,000 & 20,000 \
\text { December } & 26,000 & 24,000
\end{array}$ 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

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The Answer of The Amber Magick Shoppe has forecast its sales revenues and purchases for the last 5 months of 2005 to be as follows: $\begin{array}{lrr}&\text { Sales } & \text { Purchases } \
\text { August } & \$ 22,000 & \$ 17,000 \
\text { September } & 15,000 & 19,500 \
\text { October } & 25,000 & 29,000 \
\text { November } & 30,000 & 20,000 \
\text { December } & 26,000 & 24,000
\end{array}$ 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