Budgeted cash sales
Budgeted credit sales
Budgeted inventory purchases
Budgeted selling and admin expenses
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.
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