A monthly cash budget for Mable’s Market for the first quarter of 20X2 needs to be prepared. Cash on January 1, 20X2, is $10,000. The firm desires to maintain a minimum balance of $10,000 at the end of each month.

Total monthly sales are as follows:
November 20X1 $100,000 December 20X1 120,000 January 20X2 (est.) 110,000 February 20X2 (est.) 130,000 March 20X2 (est.) 120,000 April 20X2 (est.) 140,000 The sales are 30% cash and 70% credit card. American Express is the only acceptable credit card at Mable’s, and the charges are converted to cash 7 days after the sale. Assume the sales are even throughout the month, and that the brokerage charge is 4% on gross.
Expected other income is $2,000 from interest to be received in February. In addition, in February a range with a net book value of $300 is expected to be sold for cash at a $700 gain on the sale.
Food and beverages are paid for the month following the sale and average 40% of sales. Labor is paid for the last day of the month and averages 35% of sales.
Other expenses approximate $10,000 per month. During January, equipment costing $15,000 is to be purchased and paid for. In February, $30,000 is expected to be expended on new equipment. Funding for this ex- penditure in part comes froma long-term loan of $15,000 from the Delaware Bank and Trust.
If the firm borrows working capital funds, it must do so on an incremen- tal basis of $1,000. Funds may be borrowed at 1.5% for 30 days and paid back at the end of 30 days. Assume a year has 365 days for calculating any interest Mable’s may have to pay.
Required:
Prepare a monthly cash budget for Mable’s Market for the first 3 months of 20X2 by using the cash receipts and disbursements approach.