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# Q. 1 York Industries has planned for the following purchases in the...

Q. 1

York Industries has planned for the following purchases in the next five months.

Month Budgeted Purchases

June \$42,500

July \$38,500

August \$39,600

September \$52,800

October \$66,700

This is the established pattern for payment purchases: 15% in the month of purchase, 65% in the following month, and 20% two months after purchase.

York Industries also has the following planned sales over the next five months:

Month Budgeted Sales

June \$88,500

July \$98,500

August \$99,300

September \$82,800

October \$1,06,800

20% of sales are cash and 80% of sales are credit. Cash sales are collected in the same month as sales and credit sales are collected with the following pattern; 35% in the month of sale, 50% in the month after the sale, and 15% two months after the sale. Operating expenses for each month are \$13,000. Assume these expenses are paid for in cash at the end of each month. Required: What is the net cash flow for August and September?

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