# problems 13-22 and problem 14-20

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## Description

problems 13-22Â  and problem 14-20

Chapman Construction Company is a building contractor specializing in small commercial buildings. The company has the opportunity to accept one of two jobs; it cannot accept both because they must be performed at the same time and Chapman does not have the necessary labor force for both jobs. Indeed, it will be necessary to hire a new supervisor if either job is accepted. Furthermore, additional insurance will be required if either job is accepted. The revenue and costs associated with each job follow.

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Required
a. Assume that Chapman has decided to accept one of the two jobs. Identify the information relevant to selecting one job versus the other. Recommend which job to accept and support your answer with appropriate computations.
b. Assume that Job A is no longer available. Chapmanâ€™s choice is to accept or reject Job B alone. Identify the information relevant to this decision. Recommend whether to accept or reject Job B. Support your answer with appropriate computations.

 Problem 14-20 Preparing a cash budget Kinnion Medical Clinic has budgeted the following cash flows. January February March Cash Receipts \$1,00,000 \$1,06,000 \$1,26,000 Cash Payments For inventory purchases 90,000 72,000 85,000 For S&A expenses 31,000 32,000 27,000 Kinnion Medical had a cash balance of \$8,000 on January 1. The company desires to maintain a cash cushion of \$5,000. Funds are assumed to be borrowed, in increments of \$1,000 and repaid on the last day of each month; the interest rate is 1 percent per month. Kinnion pays its vendor on the last day of the month also. The company had a monthly \$40,000 beginning balance in its line of credit liability account from this yearâ€™s quarterly results. Required The book says that the Feb. Cash Surplus before financing activities is \$7010. I can’t seem to figure out how they came to that conclusion.

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