Problemtierney enterprises is constructing its cash budget, Ask an Expert

Accounting

Problem:

Tierney Enterprises is constructing its cash budget. Its budgeted monthly sales are $5,000, and they are constant from month to month. 40% of its customers pay in the first month and take the 2% discount, while the remaining 60% pay the in the month following the sale and do not reveive a discount. The firm has no bad debts. Purchases for next month's sales are constant at 50% of projected sales for the next month. "Other payments," whcih include wages, rent, and taxes, are 25% of sales for the current month.

Required:

Question: Construct a cash budget for a typical month and calculate the average net cash flow during the month.

Note: Show supporting computations in good form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171182

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