Complete the cash budget for XYZ Company

XYZ company predicts sales for September 12,000, October 15,000, November 9,000 and December 10,000. They wish to maintain an ending inventory of 10% of the next months sales. Sales for January are expected to be 14,000. The beginning inventory for September was 1,200 units. Prepare a production budget for September through December.

Cash Budget

Sales for XYZ are as follows: November $150,000, December $125,000, January $100,000, February $120,000, March $150,000. They are 60% credit and 40% cash. Cash sales are collected in the month of the sale and credit sales are collected 40% in the month, 50% one month later and 10% two months later.

Purchases are as follows: November $97,500, December $81,500, January $65,000, February $78,000, March $97,500. The purchases are paid for the next month. Other expenditures are $8,000 a month for rent, other expenses of $15,000 per month. The company plans a capital expenditure in February of $20,000. They plan to partially finance this with a bank loan of $10,000. A tax payment of $8,000 needs to be made in March. Prepare a cash budget for January through March with a beginning cash balance of $15,000.