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Logan Township acquired its water system from a private company on June 1. No receivables were acquired with the purchase. Therefore, total accounts receivable on June 1 had a zero balance

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Logan Township acquired its water system from a private company on June 1.Noreceivables were acquired with the purchase.Therefore, total accounts receivable onJune 1 had a zero balance.Logan plans to bill customers in the month following the month of sale, and 70% of theresulting billings will be collected during the billing month.In the next following month,90% of the remaining balance should be collectable.The remaining uncollectibleamounts will relate to citizens who have moved away.Such amounts are neverexpected to be collected and will be written o±.Water sales during June are estimated at $4,000,000, and expected to increase 30% inJuly.August sales will be 10% less than July sales.As of the end of August, how much will be the estimated amount ofreceivables from which future cash ²ows are anticipated?

Direct materials purchasing plan:
JanuaryFebruaryMarch
Scheduled production                10,000                 12,000                 15,000
Raw materials needed:
Motors (1 per unit)
Nolan Johnson is CFO for a newly formed furniture manufacturing company.  Below is the anticipated monthly production for the first year of operation, and beyond.  Nolan is interested in learning which of the first twelve months will require cash outlays of more than $100,000 toward the purchase of lumber.  Each unit requires 20 board feet of lumber at $5.80 per board foot.  All lumber is purchased in the month prior to its expected use.  Lumber purchases are paid for 10% in the month of purchase, 40% in the month following the month of purchase, and 50% in the second month following the month of purchase.

Month Units
January 0
February 800
March 500
April 1,200
May 700
June 900
July 300
August 600
September 800
October 1,300
November 400
December 400
January 600
   
Which months will require cash outlays in excess of the $100,000 amount?  Does the production in any given month necessarily correspond to the cash flow for that same month?  What are the business implications of your observation?
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