Bob has also identified a cash payment of $175,000 upon completion of a new boat dock in July. As of March 1st, the company now has $125,000 in cash on hand and would like to maintain a minimum cash balance of $85,000 at all times.
Required:
1. Prepare a Schedule of Collections and Payments for the six month period beginning in March, using the template provided and the data above.
2. Prepare a Schedule of Cash Gains and Losses by month for the six month period beginning in March, using the template provided and the data above.
3. Prepare a Schedule of Cash Surplus or Shortages by month for the six month period beginning in March, using the template provided and the data above.
4. Prepare a schedule of Net Cash Flow by month for the six month period beginning in March, using the template provided and the data above indicating the timing and amounts that must be borrowed or the amounts that can be re-invested or used in the firm.
5. Based on the information in the reports you constructed above would you recommend any changes in the credit policy of the firm? If so, what would they be? Explain your answers