Monthly Cash Budget

Grove, Inc. is a wholesaler for its only product, deluxe wireless electric drills, which sell for $$94$ each and cost Grove $$57$ each. On December $1,$ Grove's management requested a

cash budget for December. The following selected account balances at November $30,$ were gathered by the accounting department:

Actual sales for the months of October and November were $20,000$ and $30,000$ units, respectively. Projected unit sales for December and January are $50,000$ and $40,000,$

respectively. Experience indicates that $50\%$ of sales should be collected in the month of sale, $30\%$ in the month following sale, and the balance in the second month following

sale. Uncollectible accounts, returns, and allowances are negligible.

Planned purchases should provide ending inventories equal to $30\%$ of next month's unit sales volume. Approximately $70\%$ of the purchases are paid for in the month of

purchase and the balance in the following month.

Monthly operating expenses are budgeted at $$9\mathrm{.}10$ per unit sold plus a fixed amount of $$189,000$ including depreciation of $$81,000.$ Except for depreciation, $60\%$ of operating

expenses are paid in the month incurred and the balance in the following month. Interest expense is included in operating expenses.

Special anticipated year$-$end transactions include the following:

Declaration of a $$22,500$ cash dividend to be paid $2$ weeks after the December $20$ date of record.

Sale of one$-$half of the marketable securities held on November $30$ a gain of $$21,000$ is anticipated.

Pay off the note payable due December $31.$

Trade$-$in of an old computer originally costing $$675,000$ and now having accumulated depreciation of $$540,000$ at a gain of $$157,500$ on a new computer costing $$1,335,000.$

Sufficient cash will be paid at the time of trade$-$in so that only $50\%$ of the total price will have to be financed.

Grove's treasurer has a policy of maintaining a minimum month$-$end cash balance of $$135,000$ but wants to raise this to $$225,000$ at December $31.$ She has a standing

arrangement with the bank to borrow any amount up to a limit of $$450,000.$ Prepare a cash budget for Grove, Inc., for December.

Collections in December from customers:

Payments on account for merchandise purchases:

Payment of operating expenses:

Cash required at time of computer purchase: $\backslash$table$[[\backslash$table$[[$For th$]],,],[$Beginning cash balance,,$],[$Cash receipts:,,$],[$Collections from custor,,$],[,,],[$Short$-$term borrowing,,$],[$Cash available,,$],[$Cash disbursements:,,$],[$Payments on accounts,,$],[$Payments of operating,ve$),],[$Down payment on com,,Total cash disbursements,,$],[$Ending cash balance,,$]]$