Prepare a cash budget for march, april, and may

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Reference no: EM1314704

Budgeting involves computation of cash budget.

Eddie's Bar and Restaurant Supplies expects its revenues and payments for the first part of the year to be:

	January	$14,000	$18,000
February	20,000	21,300
March	26,000	19,100
April	22,000	22,400
May	18,000	14,700

Seventy percent of the firm's sales are on credit. Past experience shows that 40 percent of accounts receivable are collected in the month after sale, and the remainder is collected in the second month after sale. Prepare a schedule of cash receipts for March, April, and May. Eddie's pays its payments in the following month. 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 $2,000 on March 1. Prepare a cash budget for March, April, and May.

Reference no: EM1314704

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