LingLing Auto Parts, a family-owned auto parts store, began January with $11,000 cash. Management forecasts that collections from credit customers will be $11,600 in January and $14,700 in February. The store is scheduled to receive $6,000 cash on a business note receivable in January. Projected cash payments include inventory purchases ($14,100 in January and $13,300 in February) and selling and administrative expenses ($3,000 each month).

1.

Prepare LingLing Auto Parts's cash budget for January and February.

2.

How much cash will LingLing Auto Parts borrow in February if collections from customers that month total $13,700 instead of 0$14,700?

Ling Auto Parts

Cash Budget

January and February

January

February

Cash available

Cash payments:

Total cash payments

Less:

Ending cash balance