A B C D E 1 2 3 4 5 6 7 8 9 10 11 12 13 Rich Company's cash balance on January 1st is $110,000 and they want to keep a minimum balance of at least $40,000 at all times. The company will borrow and repay funds in increments of $1,000 at a interest rate of 6% per annum. All borrowings happen on the first day of the period in which the funds are required and all repayments occur on the last day of the period in which funds are available. Assume interest on borrowings is only paid at the time principal repayments are made. There are no cash sales and the beginning balance of receivable is expected to be collected in the 1st quarter and is $155,000. Subsequent collections are 55% in the quarter when sales take place and 40% in the following quarter. The sales forecast for the coming quarters shows the following: 1st quarter $600,000 and 2nd quarter $750,000. Direct materials of $225,000 and $285,500 are purchased and paid for in the 1st and 2nd quarter. Direct labour of $320,000 and $270,000 is incurred and paid for in the 1st and 2nd quarter. Factory overhead of $61,000 will be incurred and paid each quarter. Equipment of $38,000 will be purchased and paid for in second quarter. Prepare a cash budget for the 1st and 2nd quarter. 14 15 Required: 6969 16 17 18 CASH BUDGET 20 G H