1. CASH BUDGET Chapter 8

You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the companys operations:
	The cash balance on December 1 is $52,000. The company requires a minimum cash balance of $20,000.
	Actual sales for October and November and expected sales for December are as follows:

Sales (all on credit) October $650,000

November $775,000

December $890,000

Collections for Sales are as follows:

20% in the month of sale

75% in the month following the sale

5% is uncollectible

1. Compute the cash collections for December:

1. The following is budgeted for December.

Inventory purchases $359,000 paid in the month of purchase

New web server $92,000 cash purchase

Selling and administrative expense (includes $85,000 depreciation) $520,000

Cash Dividends $15,500

The company can borrow any amount of money in any increment to meet their cash balance requirement.

Prepare a December Cash Budget