Below you will find Natuzzi Corporations projected sales for the first eight months of 2020: January $90 000 May $300 000 February 120 000 June 270 000 March 135 000 July 225 000 April 240 000 August 150 000 Of Natuzzis sales, 10% is for cash, another 60% is collected in the month following the sale and 30% is collected in the second month following the sale. November and December sales for 2019 were $220 000 and $175 000, respectively. Natuzzi purchases its raw materials two months in advance of its sales, equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Natuzzi pays $10 000 per month for rent and $20 000 each month for other expenditures. Tax prepayments of $22 500 are made each quarter, beginning in March. The companys cash balance on 31 December 2019 was $22 000; a minimum balance of $15 000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (12% per annum) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus if, in the month of April, the firm expects to have a need for an additional $60 500, these funds would be borrowed at the beginning of April with interest of $605 ($605 = 0.12 1/12 $60 500) owed for April being paid at the beginning of May. Tasks:

a. Prepare a cash budget for Natuzzi covering the first seven months of 2020.

b. Natuzzi has $200 000 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have sufficient cash to repay the notes?