Homework answers / question archive / The Flaming Wok Restaurant expects revenues and payments for the first five months of the year   to be:   Sales Payments   January $14,000 $18,000   February 20,000 21,300   March 26,000 19,100   April 22,000 22,400   May 18,000 14,700   Seventy percent of the company's sales are on credit

The Flaming Wok Restaurant expects revenues and payments for the first five months of the year   to be:   Sales Payments   January $14,000 $18,000   February 20,000 21,300   March 26,000 19,100   April 22,000 22,400   May 18,000 14,700   Seventy percent of the company's sales are on credit

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The Flaming Wok Restaurant expects revenues and payments for the first five months of the year

 

to be:

 

Sales Payments

 

January $14,000 $18,000

 

February 20,000 21,300

 

March 26,000 19,100

 

April 22,000 22,400

 

May 18,000 14,700

 

Seventy percent of the company's sales are on credit. Past experience shows that 40 percent of

 

accounts receivable are collected in the month after sale, and the remainder are collected in the

 

second month after sale.

 

The Flaming Wok pays its payments in the following month. The cash balance on March 1st was

 

$2,000, which is also its minimum required cash balance. There is an outstanding loan of $2,000

 

on March 1.

 

Required:

 

1. Prepare a schedule of cash receipts for March, April and May.

 

2. Prepare a cash budget for March, April and May.