1. Beta Services

Scenario: Cash Budget Preparation

Data:

• Expected Sales Revenue (Month 1): $200,000
• Variable Costs (Month 1): $80,000
• Fixed Costs (Month 1): $50,000
• Beginning Cash Balance: $30,000
• Cash Sales: 40% of total sales
• Credit Sales: 60% of total sales

Requirements: Prepare Beta Services' cash budget for Month 1. Calculate the expected cash collections from credit sales assuming 30-day and 60-day collection periods. Determine the ending cash balance and discuss the importance of cash budgeting for Beta Services' liquidity management.