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Unformatted text preview: 6,000 units Revised ending inventory 9,600 units Total requirements 15,600 units Beginning inventory (600) units Purchases 15,000 units Purchases at $10 each $150,000 Being aware of this cash shortage in advance, management has time to consider alternatives actions that will alleviate the possible cash shortage. Possible actions include: P Conserve cash by slower payments of bills. Perhaps they do not have to pay all debts in the month incurred. p Delay the cash dividend. D “Encourage” customers to pay cash at the time of sale. “ Invest more cash in the business. For the size of the operations there may be inadequate owner investment. b Secure a line of credit with the bank....
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- Spring '11
- $5, $10, $150,000, $50, $ 5,000 25,000 20,000 10,000