Gamma Construction Ltd.

Scenario: Prepare a Cash Budget

Data:

• Beginning Cash Balance: $50,000
• Expected Cash Receipts:
  • Sales Collections: $100,000
  • Loan Proceeds: $20,000

• Expected Cash Disbursements:
  • Materials Purchases: $30,000
  • Salaries and Wages: $40,000

Requirements:

1. Prepare a monthly cash budget for January.
2. Analyze the ending cash balance for January.
3. Discuss the importance of cash budgeting in managing liquidity.