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    A Schedule of Cash Payments

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    The Elliot Corporation has forecast the following sales for the first seven months of the year:
    January $12,000
    February $16,000
    March $18,000
    April $24,000
    May $12,000
    June $20,000
    July $22,000

    Monthly material purchases are set equal to 20 percent or forecasted sales for the next month. Of the total material costs, 40 percent are paid in the month of purchase and 60 percent in the following month. Labor costs will run $6,000 per month, and fixed overhead is $3,000 per month. Interest payments on the debt will be $4,500 for both March and June. Finally, Elliot's sales force will receive a 3 percent commission on total sales for the first six months of the year, to be paid on June 30.
    Prepare a monthly summary of cash payments for the six-month period from Jan-June. (Note: Compute prior Dec purchases to help get total material payments for Jan).

    How do I set up the summary for this problem and compute prior Dec. purchases?

    © BrainMass Inc. brainmass.com June 3, 2020, 8:48 pm ad1c9bdddf
    https://brainmass.com/business/cash/schedule-cash-payments-153651

    Solution Preview

    For your convenience, I have attached a formatted MS Excel spreadsheet containing the answers to the questions below.

    Monthly Summary of Cash Payments for the Elliot Corporation
    Given:

    The Elliot Corporation has forecast the following sales for the first seven months of the year:
    January ...

    Solution Summary

    This post contains a formatted MS Excel file which provides the reader with an example on how to complete a cash payment schedule.

    $2.19

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