Bavarian Brew's schedule of projected cash disbursement
All of Bavarian Brew's sales are credit sales. The company collects 60% of its sales in the next month and the remainder in the month after that.
The company's purchases are 75% of its sales. Of those purchases 15% are paid in cash, 50% are paid in the following month and the remainder in the month after that. The company's wages and salaries equal 15% of sales each month plus $50. Taxes of $125 are due in April. The company is going to purchase new machinery worth $1000 in March and pay 50% right away and the rest in April. In addition, the company will pay a $175 dividend in February.
-If Bavarian Brew starts the year with a cash balance of $500,what is the cash balance at the end of January? Assume that December sales were $450 and November sales were $550.

Question

Bavarian Brew's schedule of projected cash disbursement
  All of Bavarian Brew's sales are credit sales. The company collects 60% of its sales in the next month and the remainder in the month after that.
The company's purchases are 75% of its sales. Of those purchases 15% are paid in cash, 50% are paid in the following month and the remainder in the month after that. The company's wages and salaries equal 15% of sales each month plus $50. Taxes of $125 are due in April. The company is going to purchase new machinery worth $1000 in March and pay 50% right away and the rest in April. In addition, the company will pay a $175 dividend in February.
-If Bavarian Brew starts the year with a cash balance of $500,what is the cash balance at the end of January? Assume that December sales were $450 and November sales were $550.

Quizplus · Accepted Answer

in: (.4)550 + (.6)450 = 490
out: (.35)(.75)(550)+ (.5)(.75)(450)+ (.15)(.75)(510)+ 50 + (.15)(510)= 497
cash balance: 500+490-497 =493

Bavarian Brew's Schedule of Projected Cash Disbursement