The following information pertains to Maxi Corporation:

Month Sales Purchases
July $40,000 $20,000
August 30,000 15,000
September 20,000 10,000
October 50,000 25,000
November 60,000 30,000
December 70,000 35,000

? 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.

Cash Inflows:
Cash collections from customers:
August (0.28 × $30,000 ) $8,400
September (0.50 × $20,000 ) 10,000
October (0.20 × $50,000 ) 10,000
Total $28,400

Cash Outflows:
Cash outflows for operating:
Suppliers ** $14,350
Labor 10,000
Operating costs 3,000
Total $27,350

Net cash flows this month $1,050
Opening cash 4,300
Cash dividends paid (10,000 )
Cash from stock issue 6,000
Cash Available 1,350
Opening Loan 0
Borrowing Made 3,000
Borrowing Repaid 0
Ending Loan 3,000
Ending cash $4,350

**$7,350 + $7,000 = Oct (0.30 × $25,000 × .98 ) + Sept (0.70 × $10,000 ).