Kamal Co. has an average collection period (ACP) of 30 days and an operating cycle of 170 days. It has a policy of keeping at least RO 15,000 on hand as a minimum cash balance, and has a beginning cash balance for the first quarter of RO 20,000. Beginning receivables for the first quarter amount to RO 30,000. Sales for the first, second and the third quarters are expected respectively to be RO 100,000; RO120,000; and RO 150,000. The purchases amount represents 50% of the next quarter's forecasted sales. The quarterly wages and other expenses is RO 7,000. The capital expenditure occurs in the second quarter and equals to RO 15, 000. The accounts payable period is 45 days. The beginning accounts payable is RO 10,000. a. What are cash collections in the first and second quarters? Q1 Q2 Beginning Receivables Sales Cash collections Ending receivables b. What are cash disbursements for the first and second quarters? Q1 Q2 Payment of amounts Wages and other expenses Capital expenditures Total cash disbursements What is the cumulative surplus (deficit) at the end of the first and second quarters? C. Q1 Q2 Total cash collections Total cash disbursements Net cash inflow Beginning cash balance Total cash disbursements Ending cash balance Minimum cash balance Cumulative surplus (deficit)
Kamal Co. has an average collection period (ACP) of 30 days and an operating cycle of 170 days. It has a policy of keeping at least RO 15,000 on hand as a minimum cash balance, and has a beginning cash balance for the first quarter of RO 20,000. Beginning receivables for the first quarter amount to RO 30,000. Sales for the first, second and the third quarters are expected respectively to be RO 100,000; RO120,000; and RO 150,000. The purchases amount represents 50% of the next quarter's forecasted sales. The quarterly wages and other expenses is RO 7,000. The capital expenditure occurs in the second quarter and equals to RO 15, 000. The accounts payable period is 45 days. The beginning accounts payable is RO 10,000. a. What are cash collections in the first and second quarters? Q1 Q2 Beginning Receivables Sales Cash collections Ending receivables b. What are cash disbursements for the first and second quarters? Q1 Q2 Payment of amounts Wages and other expenses Capital expenditures Total cash disbursements What is the cumulative surplus (deficit) at the end of the first and second quarters? C. Q1 Q2 Total cash collections Total cash disbursements Net cash inflow Beginning cash balance Total cash disbursements Ending cash balance Minimum cash balance Cumulative surplus (deficit)
Chapter16: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 11P
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Transcribed Image Text:Kamal Co. has an average collection period (ACP)
of 30 days and an operating cycle of 170 days. It has a
policy of keeping at least RO 15,000 on hand as a
minimum cash balance, and has a beginning cash
balance for the first quarter of RO 20,000.
Beginning receivables for the first quarter amount to
RO 30,000. Sales for the first, second and the third
quarters are expected respectively to be RO 100,000;
RO120,000; and RO 150,000. The purchases amount
represents 50% of the next quarter's forecasted sales.
The quarterly wages and other expenses is RO 7,000.
The capital expenditure occurs in the second quarter
and equals to RO 15, 000.
The accounts payable period is 45 days. The beginning
accounts payable is RO 10,000.
a.
What are cash collections in the first and second
quarters?
Q1
Q2
Beginning
Receivables
Sales
Cash collections
Ending
receivables
Transcribed Image Text:b.
What are cash disbursements for the first and
second quarters?
Q1
Q2
Payment of
amounts
Wages and other
expenses
Capital
expenditures
Total cash
disbursements
What is the cumulative surplus (deficit) at the end
of the first and second quarters?
C.
Q1
Q2
Total cash
collections
Total cash
disbursements
Net cash inflow
Beginning cash
balance
Total cash
disbursements
Ending cash
balance
Minimum cash
balance
Cumulative surplus
(deficit)
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