Funds may be borrowed at 10% to meeting any shortfall in cash balance and an surplus may be invested at 6% per annum. You are required to prepare a suitable cash budget. Please see data in attachments (2).

Ronald Stalk inherited family business from his father, who has now retired. Ronald was careful not to extend undue risk and only accepted products of highest quality for distribution. While bills were paid in time, normal credit was extended to customers and retailers who were well known. Regardless, the collection terms had formulated with a pattern as follows: Sale Bad debts