A company has a $300,000 90 day loan. If the loan is granted, it will be made in Oct and repaid in Dec, and have an interest cost of $12,000 payable at the time of repayment.

1. the loan will be granted on Oct 1. The cash balance at the beginning of Oct is $260,000. Of the accounts receivable at Sep 30, the company expected to collect $1,410,000 in Oct and $72,000 in Nov. Some receivables will become uncollectible.
2. Past collection experience indicates that 20% of a month's sales will be collected in the month of the sales, 75% the next month, 4% the second month after the sale, and 1% will never be collected and represents bad debts.
3. Sep purchases were $1,080,000

3 month load period:

Oct Nov Dec

Sales $2,000,000 $3,000,000 $2,500,000

Merchandise purchases 1,200,000 1,800,000 1,500,000

Wages paid 90,000 90,000 80,000

Lease payments 850,000 950,000 750,000

Equipment purchases 80,000 - -

Amortization 100,000 100,000 100,000

how to make the schedule of expected cash collections for Oct, Nov, and Dec?

how to make a cash budget by month

Can the loan be repaid as planned if the company needs a minimum starting cash balance of $200,000 each month?