Whitefish company budgets its cash two months at a time

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Reference no: EM13581516

Whitefish Company budgets its cash two months at a time. Budgeted cash disbursements for March and April, respectively, are: for inventory purchases, $90,000 and $82,000; for selling and administrative expenses (in- cludes $5,000 depreciation each month), $75,000 and $70,000; for equipment purchases, $15,000 and $6,000; and for dividend payments, $5,000 and $-0-. Budgeted cash collections from customers are $150,000 and $185,000 for March and April, respectively. The company will begin March with a $10,000 cash balance on hand. There should be a minimum cash balance of $5,000 at the end of each month. If needed, the company can borrow money at 12% per year. All borrowings are at the beginning of a month, and all repayments are at the end of a month. Interest is paid only when principal is being repaid. Prepare the cash budget for March and April.

Reference no: EM13581516

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