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Question - Prepare Cash Budget for the months of January to March 2019 Sales information for November and December of 2018 and Sales forecast for January to March of 2019 are as follows:
November (2018) 150,000
December (2018) 155,000
January (2019) 120,000
February (2019) 135,000
March (2019) 140,000
The following information is also available from the credit manager regarding cash sales and credit sales
Cash sales 40%
Collect after 30 days 40%
Collect after 60 days 20%
Cost of sales are 70% of each month's sales
These purchase are paid 30 days after the purchases are made Monthly sellling and adminsitrative expenses are as followed:
Rent 6,200
Salaries 32,000
Utilities 2,000
Office supplies 1,500
Other Information: Their will be a purchase of an equipment in February for: $30,000. The cash balance on January 1, 2019 is: $27,500.
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