CASH BUDGET; REQUIRED:

1. Prepare a schedule showing cash collections during October.

2. Prepare cash disbursements (payments) during October.

3. Assuming that company had $150,000 cash balance as of October 1, calculate cash balance as of October 31.

Companys accounts receivable collection experience is as follows:

Cash collected from current months sales; terms 1/10 n/30: 20%

Cash collected from prior months sales (no discount) 65%

Cash collected from sales two months ago: 13%

Uncollectible receivables 2%

Companys estimated credit sales (company has no cash sales):

July $480,000

August 420,000

September 370,000

October 350,000

November 400,000

Companys monthly variable costs, paid as incurred, equal 60% of monthly sales. Monthly fixed expenses are: $80,000 (Rent Expense : $20,000; Salaries Expense: $30,000; Depreciation Exp.: $18,000; Advertising Expense: $8,000; Depletion Expense: $4,000)

October cash collections: $_____________________

October cash disbursements: $__________________

October 31 cash balance: $_____________________