Allan International is in the construction business. In 2010, it is expected that 30 percent of a month's sales will be received in cash, with the balance being received the following month. Of the purchases, 60 percent are paid the following month, 30 percent are paid in two months, and the remaining 10 percent are paid during the month of purchase. The sales force receives $2,000 a month base pay plus a 4 percent commission. Labor expenses are expected to be $6,000 a month. Other operating expenses are expected to run about $5,000 a month, including $1,000 for depreciation. The ending cash balance for 2009 was $28,000. Sales Purchases 2009Actual November $140,000 $ 80,000 December 160,000 100,000 2010Budgeted January $ 90,000 $ 90,000 February 80,000 100,000 March 100,000 80,000 Prepare a cash budget and determine the projected ending cash balances for the first three months of 2010.

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