Preparing cash budget for second quarterprepare a cash

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Reference no: EM13356342

Preparing Cash Budget for second quarter.

Prepare a cash budget for Rotor Products, Inc. for the second quarter of 2006, based on the following information. The marketing department has provided you with the following sales estimates, all of which are for cash:

	Total sales
March 2006 (actual)	$425,000
April 2006	$330,000
May 2006	$420,000
June 2006	$450,000

The company estimates its purchases at 60 percent of the next month's sales, and payments for those purchases are budgeted to lag the purchases by 1 month.

Various disbursements have been estimated as follows:

	April	May	June
Wages\\salaries	$220,000	$190,000	$190,000
Rent	$14,000	$14,000	$14,000
Other Expenses	$5,000	$6,000	$7,000

In addition, a tax payment o $55,000 is due on April 15. The company's projected cash balance at the beginning of April is $60,000, and the company desires to maintain a balance of $50,000 at the end of each month.

Reference no: EM13356342

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