The Following Information Pertains to Maxi Corporation

Essay

The following information pertains to Maxi Corporation:

∙ Cash is collected from customers in the following manner:
Month of sale 20%
Month following the sale 50%
Two months following sale 28%
Amount uncollectible 2%
∙ Thirty percent of purchases are paid for in cash in the month of purchase,and the balance is paid the following month. A 2% discount is allowed on purchases paid for in the month of purchase.
∙ Labor costs equal 20% of sales; other operating costs of $5,000 per month (including $2,000)of depreciation. Both are paid in the month incurred.
∙ The cash balance on October 1 is $4,300. A minimum cash balance of $4,000 is required at the end of the month. Money is borrowed in multiples of $1,000.
∙ The company will issue $6,000 of common stock and pay $10,000 in dividends in October.
∙ There is no debt outstanding at October 1.
Required:
Prepare a projected cash flow statement in good form for the month ended October 31.