|
|
May
|
June
|
July
|
August September
|
|
Credit Sales
|
$65,500
|
$58,950
|
$53,055
|
$47,750
|
$52,524
|
|
70% collected in next month
|
45,850
|
41,265
|
37,139
|
33,425
|
36,767
|
|
30% collected in two months
|
19,650
|
17,685
|
15,917
|
14,325
|
15,757
|
|
Cash Sales
|
18,500
|
16,650
|
14,985
|
13,487
|
14,835
|
|
Credit Purchases-due in 30 days
|
24,500
|
24,990
|
25,490
|
26,000
|
26,520
|
|
Cash Purchases
|
4,100
|
4,141
|
4,182
|
4,224
|
4,266
|
|
Payroll-34% of total sales
|
28,560
|
25,704
|
23,134
|
20,820
|
22,902
|
|
Service on mortgage-Quarterly payments
|
|
15,450
|
|
|
15,450
|
|
Quarterly Insurance Payment
|
|
5,400
|
|
|
5,400
|
|
Partner distribution-due quarterly
|
|
10,000
|
|
|
10,000
|
Question
1. From the information provided in the chart, determinee available cash for the months of July, August, and September. Assume a beginning cash balance of dollar (10,000) in July.
2. How can this property better manage its working capital? Provide specific suggestions for Watree Lodge management.