Medical Supplies purchases first-aid items from large wholesalers. Medical Supplies then assembles

and sells first-aid kits to businesses and contracts to maintain the first-aid kits. Using the following

information, prepare a cash budget for January:

a. Cash in the bank on January 1 is $ 33,000.

b. Actual sales for October, November, December, and projected sales for January are as follows:

October November December January

Cash $ 12,000 $ 11,500 $ 8,200 $ 12,500

Credit $ 31,000 $ 29,400 $ 32,000 $ 28,000

c. Payments on credit sales are received 50% in the month of sale, 31% in the month following the

sale, and 15% and 4% in the second and third months, respectively, following the sale.

d. Total administrative and selling expenses (all cash) are $ 25,000.

e. Purchases are always paid 30 days after delivery. Purchases for October, November, and

December were $ 28,000, $ 39,000, and $ 29,500, respectively.

f. Cash dividends of $ 22,000 are paid.

g. Any cash excess is used to purchase 30-day government securities, and any cash deficiency is

compensated by short-borrowing.

h. Management desires a minimum balance of $ 9,000 in the bank.

Prepare a cash budget for the month January in good form.