Construct a monthly cash budget for westmark for jan

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Reference no: EM132032487

The treasurer of Westmark Industrial Inc., a wholesale distr. of household appliances, wants to estimate his companys cash balances for the first three months of 2015.

Using provided info. construct a monthly cash budget for westmark for Jan. thru March 2015. Westmarks sales are 20% for cash, w/ the rest on 30 day credit terms.

Purchases are all on 60 day terms. Does it appear from your results that the treasurer should be concerned about investing excess cash or looking for a bank loan? may ignore the effect of added borrowing on interest expense.

Westmark		info. ($ thousands)
		2014(actual)			2015(proj.)
	Oct.	Nov.	Dec.	Jan.	Feb.	March
Sales	360	420	1,200	600	240	240
Purchases	510	540	1,200	300	120	120
wages payable monthly	180
Princ. pymnt on debt due March	210
Interest due in March	90
Dividend payable in March	300
Taxes payable in Feb.	180
Addition to Accum. Deprec. in March	30
Cash bal. on Jan. 1, 2015	300
Min. desired cash balance	150

Reference no: EM132032487

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