Eddies had a cash balance of 2000 on march 1 which is also

Reference no: EM13569847

Eddie's Bar and Restaurant Supplies expects its revenues and expenses for the first 5 months of the year to be:

Sales Expenses
January $24,000 $18,000
February 20,000 21,300
March 35,000 19,100
April 22,000 22,400
May 28,000 14,700

80% of the firm's sales are on credit. Past experience shows that 40% of accounts receivable are collected in the month after sale, and the remainder is collected in the second month after sale. 100% of Expenses are paid in the month after it occurs.

Eddie's had a cash balance of $2,000 on March 1, which is also its minimum required cash balance. There is an outstanding loan of $6,000 that was taken out on January 1st and paid when cash is available.

a. Prepare a schedule of cash receipts for Jan, Feb, March, April, and May.

b. Prepare a cash budget for Jan, Feb, March, April, and May, each month ending with the ending cash balances.

Reference no: EM13569847

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