What is the budgeted cash balance

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Reference no: EM13145783

Giovanni runs a small tax preparation company. Giovanni makes over 80% of his money during the busy February 1-April 15 tax season; he is always concerned that he will not have enough money to pay his bills over the rest of the year. Thus, Giovanni is very careful about budgeting his cash. Giovanni has $5,000 in the company checking account on February 1, 2010. He estimates the following items for the rest of 2010: Cash Collections from Customers, 2/1-4/15 120,000 Cash Collections from Customers, 4/16-12/31 25,000 Operating Expenses Paid, 2/1-12/31 85,000 Interest on Small Business Loan payable on 1/15 and 7/15 5,000 Depreciation on Office Equipment 8,000 Professional Malpractice Insurance for 2011, due 12/31/10 10,000 Finally, Giovanni estimates that he needs to withdraw $55,000 from the business (as dividends) to cover his own personal living expenses this year. Will Giovanni have enough cash to get through the year? What is his budgeted cash balance on December 31, 2010?

Reference no: EM13145783

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