Budgeted cash sales
15000
18000
16000
Budgeted credit sales
20000
21000
22000
Budgeted inventory purchases
22000
24000
28000
Budgeted selling and admin expenses
3000
2000
2500
Credit sales are expected to be collected 60% in month of sale; 40% in month following
Inventory purchases are expected to be paid 50% in month of purchase; 50% in month following
All selling and admin expenses are expected to be paid in full in month incurred. Depreciation expense is
included in budget at $500 per month
Company budgets the purchase of equipment in February for $45000
Company maintains a minimum cash balance of $10000
Interest rate for any borrowings is 6%. Borrowings (and repayments) are always made on the last day of the month
Prepare a cash budget for January February and March.