Cash Flow & Budgeting Cash collection on credit sales: June July August Using the data below (in US $), prepare a Cash Budget for Alma Corp. Credit sales 1. Budgeted Sales Data: Total collection Cash disbursement for purchase of inventory: June July August Purchases June July August Cash sales 90,000 215,000 185,000 Credit sales 135,000 145,000 90,000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Total payments 2. Budgeted Purchase data: June July August Purchases 300,000 250.000 105,000 Purchases of inventory are all on credit and 50% is paid in the month of purchase and 50% in the month following purchase. Alma Corp. Cash Budget July & August July August Beginning Cash balance Add: Cash Collections: 3. Other Cash payments: Selling expenses are $48,000 each month, Rent for the period July-Dec -- will be paid in July - $103,000 Purchase of equipment in August for $50,000 cash. Total Cash available Less: Cash Disbursements /Payments 4. Other data: The company wishes to maintain a minimum cash balance of $40,000 at the end of each month. The company borrows money from the bank if necessary to maintain the minimum cash balance. $150 interest was paid in August. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000. Total Cash Disbursements / Payments Excess / (Deficiency) of Cash Financing Total Financing Ending Cash Balance