1. 1. Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for

the next three months are:

SeptemberP350,000

October500,000

November400,000

Sales for August were $400,000. All sales are on account. Galaxy Lighting Company

estimates that 60% of the accounts receivable are collected in the month of sale with

the remaining 40% collected the following month. The units sell for $30 each. The

cash balance for September 1 is $100,000.

Generally, 60% of purchases are due and payable in the month of purchase with the

remainder due the following month. Purchase cost per unit for materials is $18. The

company maintains an end-of-the-month inventory of 1,000 units plus 10% of next

months unit sales.

In addition to the information given, selling and administrative expenses paid in cash

are $120,000 per month.

Requirement: Prepare a monthly cash budget for September and October for Galaxy

Lighting Company.