Kiwi Company provides security monitoring services. They employ 4 security specialists. Each specialist works an average of 180 hours a month. The companys controller has compiled the information that follows:

	Actual Data for Last Year November	December	Forecasted Data for Current Year January February	March
Security billings (sales)	$30,000	$35,000	$25,000 $20,000	$30,000
Selling & Admin. Exp.	10,000	11,000	9,000 8,000	10,500
Operating Supplies	2,500	3,500	2,500 2,000	3,000
Service overhead	3,000	3,500	3,000 2,500	3,000

Sixty percent of the client billings are cash sales collected during the month of sale; 30% are collected in the first month following the sale; and 10% are collected in the second month following the sale. Operating supplies are paid for in the month of purchase. Selling and administrative expenses and service overhead are paid in the month following the costs incurrence.

The company has a bank loan of $12,000 at a 12% annual interest rate. Interest is paid monthly, and $2,000 of the loan principal is due on February 28. Income taxes of

$2,500 for the last calendar year are due and payable on March 15. The four security specialist each earn $15 per hour, and all payroll related employee benefit costs are included in service overhead. The company anticipates no capital expenditures for the first quarter of the coming year. It expects its cash balance on December 31 to be

$15,000.

Instructions: Prepare a monthly cash budget for January, February, and March.