My question :

1. Is there need any formula to calculate the cash budget?

2. Why C record in August, not in September

3. Why E must use the previous month sales and record in next month?

4. Why H doesn't affect anything?

5. How to calculate the beginning cash balance?

Answer: APPLE Computer Inc. is attempting to estimate its needs for funds during each of the months covering the third quarter of 20XX. Pertinent information is given below: Worksheet June July August $130,000 Sales $70,000 $90,000 September $110,000 66,000 54,000 78,000 a. Past and estimated future sales for 20XX: April $80,000 July $90,000 May 95,000 August 130,000 June 70,000 September 110,000 October 140,000 b. Rent expense is $2,500 per month. Cash sales Collections (40% 1 month Water) 28,000 52,000 36,000 $114,000 Total cash collection $82,000 $118,000 c. A quarterly interest payment on $100,000 in 7% notes payable is to be paid during September, 20xx. Cash Budget Cash receipts from sales $82,000 $114.000 $118,000 Cash disbursements Payments on purchases Rent d. Wages and salaries are estimated as follows: July $8,000 August 10,000 September 12,000 Payments are made within the month in which the wages are earned. (88,000) (2,500) (12,000) (72,000) (104,000) (2,500) (2,500) (8,000) (10,000) 0 (1,750) (7,500) Wages and salaries Interest (0.07 x 100,000 x 1/4) Purchase of forklift truck Short-term-borrowing interest (0.13) 0 e. Sixty percent of sales are for cash, with the remaining 40% collected in the month following the sale. 0 0 0 Total cash disbursement 90,000 (118,250) (102,500) f. APPLE pays 80% of the sales price for merchandise and makes payment in the same month in which the sales occur, although purchases are made in the month prior to the anticipated sales. Net (8,000) 15,500 (4,250) 59,000 67,000 54,750 g. APPLE plans to pay $7,500 in cash for a new forklift truck in July. Beginning cash balance Borrowing (repayment) Ending balance 0 0 0 $59,000 $54,750 $70,250 h. Short-term loans can be obtained at the end of each month at 13% annual interest with interest paid during each month for which the loan is outstanding. , APPLE's ending cash balance for June 30, 200X is $67,000: the minimum balance the firm wishes to have in any month is $35,000. Required: Set up a cash budget for APPLE for the quarter ended September 30, 20XX