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    Big Bob's Discount Appliances expects sales of $5,000, $5,00

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    Please answer part 2.

    Answer the following budgeting questions for Big Bob's Discount Appliances:

    1. Big Bob's Discount Appliances expects sales of $5,000, $5,000, and $10,000 during April, May, and June (big sale in June). To build business, Big Bob lets all customers buy on credit, and all do so. In the past, 50% of Big Bob's sales have been collected during the month of sale, 40% are collected the following month, and 10% the month after that. If this trend continues, what will be Big Bob's total cash collections in the month of June?

    Total collections in the month of June:

    June sales collection 10000*.50 5000
    May sales collection 5000*.40 2000
    April sales collection 5000*.10 500

    Total cash collections $7500

    2. Big Bob expects to have $100 in cash on hand at the beginning of June, and the company's target cash balance is $100. Net cash flow for June is minus $300. Assuming that Charley borrows to meet short term cash needs and pays back as soon as surplus cash is available, what will be the company's ending cash balance after financing at the end of June?

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    Solution Preview

    2. Big Bob expects to have $100 in cash on hand at the beginning of June, and the company's target cash balance is $100. ...

    Solution Summary

    Big Bob's Discount Appliances expects sales of $5,000, $5,000, and $10,000 during April, May, and June (big sale in June). To build business, Big Bob lets all customers buy on credit, and all do so.

    $2.19

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