Reference no: EM132743329

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

                         Sales                    Payments

January       P14,000                   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 on credit. Past experience shows that 40% of accounts receivable are collected in the month after sale, and the remainder are collected in the second month after sale. Prepare schedule of cash receipts for March, April, and May. Eddie pays its payments in the following month. Eddie had a cash balance of P2,000 on March 1, which is also its minimum required balance. There is an outstanding loan of P2,000 on March 1.

Problem 1: Prepare cash budget for March, April and May.