How do you answer this question? Roxy the candle maker Roxy makes and sells scented candles in her shop and on-line. She also caters for functions such as parties, weddings etc. The candles cost $5 to make, and sell for $12. Roxy buys in the raw materials the month before she sells the candles. She pays a deposit of 20% when she orders and the rest the following month At the start of the year she owed $1,000 to supplier for the previous month Her customers pay 75% in the month of purchase and 25% the following month She pays rent of $1,000 on the shop in cash during the month before it is due She pays cash wages of $500 a month during the month Her other running costs are $900 a month, but this includes $200 for depreciation of the candle making machine In month 4 in the forthcoming year she intends to invest $5,000 on a new machine At the start of the year she has a Bank balance of $3,500 and is owed $600 from sales from the previous year, all of which will be collected in month 1 1. Calculate her cash flow for the first 6 months of the year, and advise her Her predicted sales are as follows Jan Feb Mar April May June July 300 350 350 450 500 550 600

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter16: Tax Research

Section: Chapter Questions

Problem 64DNC

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Roxy the candle maker

Roxy makes and sells scented candles in her shop and on-line. She also caters for functions such as parties, weddings etc.

The candles cost $5 to make, and sell for $12.
Roxy buys in the raw materials the month before she sells the candles. She pays a deposit of 20% when she orders and the rest the following month
At the start of the year she owed $1,000 to supplier for the previous month
Her customers pay 75% in the month of purchase and 25% the following month
She pays rent of $1,000 on the shop in cash during the month before it is due
She pays cash wages of $500 a month during the month
Her other running costs are $900 a month, but this includes $200 for depreciation of the candle making machine
In month 4 in the forthcoming year she intends to invest $5,000 on a new machine
At the start of the year she has a Bank balance of $3,500 and is owed $600 from sales from the previous year, all of which will be collected in month 1
1. Calculate her cash flow for the first 6 months of the year, and advise her







Her predicted sales are as follows	Jan	Feb	Mar	April	May	June	July
	300	350	350	450	500	550	600

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