July	August	September
Raw materials used	$40,000	$36,000	$44,000
Salaries	70,000	98,000	92,000
Maintenance and repairs	18,000	18,000	18,000
Depreciation	36,000	36,000	36,000
Utilities and other	14,000	14,000	15,000
Dividends paid	-0-	10,000	-0-
Payment on bonds	8,000	8,000	8,000

Sales for July, August, and September are expected to be $200,000, $180,000, and $220,000, respectively, for Pasta Company. All sales are on account (terms 2/15, net 30 days) and are collected 50 percent in the month of the sale and 50 percent in the following month. One-half of all sales discounts are taken on the average. Raw materials are purchased one month before being needed, and all purchases and expenses are paid for as incurred. Activities for the quarter are provided on the left.

Required: Using the given information, prepare the cash budget for August if the cash balance on August 1 is $12,000 and minimum cash balance for each month should be $10,000. Assume that cash can be borrowed in $1,000 increments from the local bank with no interest charges.

Cash Budget for August

Beginning cash balance

Cash receipts from sales:

July sales collected in August (200000 *.50)

August sales collected in August (180000 * .50)

Total cash receipts

Cash disbursements:

Raw materials

Salaries

Maintenance and repairs

Utilities and other

Dividends paid

Payment on bonds

Total disbursements

Expected ending balance

Borrowings in August

Ending cash balance