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cash budget

Nogueiras Corp’s 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 in the month following the sale and do not receive a discount. The firm has no bad debts. Purchases for next month’s sales are constant at50% of projected sales for the next month. “Other payments,” which include wages, rent, and taxes, are 25% of sales for the current month. Construct a cash budget fora typical month and calculate the average cash gain or loss during the month.

a. $1,271
b. $1,092
c. $1,150
d. $1,210
e. $1,334
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Answer #1

Nogueiras Corp’s 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 the2% discount, while the remaining 60% pay in the month following the sale and do not receive a discount. The firm has no bad debts. Purchases for nextmonth’s sales are constant at 50% of projected sales for the next month. “Other payments,” which include wages, rent, and taxes, are 25% of sales forthe current month. Construct a cash budget for a typical month and calculate the average cash gain or loss during the month.

a. $1,271
b. $1,092
c. $1,150
d. $1,210---CORRECT ANSWER
e. $1,334

answered by: HELP PLEAZ!
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