Quarters * 1 2 3 4 1 (next year) Sales (Rs.) 500,000 600,000 650,000 800,000 550
ID: 2770613 • Letter: Q
Question
Quarters *
1
2
3
4
1 (next year)
Sales (Rs.)
500,000
600,000
650,000
800,000
550,000
* Each quarter consists of 3 months (90days)
· Accounts Receivable:
o Beginning receivables =Rs. 250,000
o Average Collection Period= 30 days
· Accounts Payable:
o Purchases = 50 % of nextquarter’s sales
o Beginning payables = Rs.125,000
o Accounts Payable Period is45 days
· Other expenses:
o Wages, taxes and otherexpenses are 25% of sales
o Interest and dividendpayments are Rs. 50,000
o A major capitalexpenditure of Rs. 200,000 is expected in the second quarter
You are just required to calculate the Cash Collections(Receipts) and Cash Disbursements (Payments) for four Quarters.
Quarters *
1
2
3
4
1 (next year)
Sales (Rs.)
500,000
600,000
650,000
800,000
550,000
Explanation / Answer
Quarter 1 2 3 4 1(next year)
Sales 500000 600000 650000 800000 550000
Sales begging receivable = 250000
Collection period = 30 days.
Purchases (50% of next year quarter sales):
300000 325000 400000 275000
Purchases begging payable = 125000
Average payable period = 45 days.
Other expenses:
Wages, taxes and other exp. (25% of sales)
125000 150000 162500 200000
Interest and dividend
50000 50000 50000 50000
Capital expenses
- 200000 - -
Cash collection and Cash payment for 4quarters:
1 2 3 4
Collection (Receipts):
Sales 250000 500000 600000 650000
Payments:
Purchases 125000 300000 325000 400000
Wages, taxes and other 125000 150000 162500 200000
Interest anddividend 50000 50000 50000 50000
Capitalexpenditure - 200000 - -