Part 3

Table 3: Cash Budget (Cont.) Cash collections:
	July		August			September		October	November		December
Sales	666,000		2,442,000			305,250		610,500	980,000		2,000,000
Month 0 collections	333,000		1,221,000			152,625		305,250	490,000		1,000,000
Month -1 collections	122,100		199,800			732,600		91,575	183,150		294,000
Month -2 collections	39,886		79,772			130,536		478,632	59,829		119,658
Total collections	494,986		1,500,572			1,015,761		875,457	732,979		1,413,658
Beginning accounts receivable	244,200		414,400			1,354,200		641,025	366,300		612,100
Sales	666,000		2,442,000			305,250		610,500	980,000		2,000,000
Cash collections	494,986		1,500,572			1,015,761		875,457	732,979		1,413,658
Ending accounts receivable	414,400		1,354,200			641,025		366,300	612,100		1,196,000
Cash disbursements:
	July		August			September		October	November		December
Beginning accounts payable	466,200		1,709,400			213,675		427,350	686,000		1,400,000
Purchases	1,709,400		213,675			427,350		686,000	1,400,000		140,000
Payment of accounts payable	466,200		1,709,400			213,675		427,350	686,000		1,400,000
Ending accounts payable	1,709,400		213,675			427,350		686,000	1,400,000		140,000
Payment of accounts payable	466,200		1,709,400			213,675		427,350	686,000		1,400,000
Wages and other expenses	133,200		488,400			61,050		122,100	196,000		400,000
Taxes	20,833		20,833			20,833		20,833	20,833		20,833
Capital expense	0		0			0		0	0		0
ST interest expense	0		0			2,464		0	0		0
LT interest expense	50,000		50,000			50,000		50,000	50,000		50,000
Dividends	0		0			30,000		0	0		30,000
Cash disbursements	670,233		2,268,633			378,022		620,283	952,833		1,900,833
Cash collections	494,986		1,500,572			1,015,761		875,457	732,979		1,413,658
Cash disbursements	670,233		2,268,633			378,022		620,283	952,833		1,900,833
Net cash inflow	175,247		768,061			637,739		255,174	219,854		487,175
Cash budget:
		January		February	March		April			May		June
Beginning cash balance	915,905		740,658			200,000		610,336	865,509		645,655
Net cash inflow	175,247		768,061			637,739		255,174	219,854		487,175
Ending cash balance	740,658		27,403			837,739		865,509	645,655		158,480
Minimum cash balance	200,000		200,000			200,000		200,000	200,000		200,000
Surplus/deficit	540,658		227,403			637,739		665,509	445,655		41,520
Short-term borrowing	0		227,403			0		0	0		41,520
Repayment of ST debt	0		0			227,403		0	0		0
Cumulative ST debt	0		227,403			0		0	0		41,520
ST interest expense	0		2,464			0		0	0		450

Table 4: Sales Forecasts for next 13 months

January	200,000
February	400,000
March	800,000
April	2,200,000
May	220,000
June	440,000
July	720,000
August	2,640,000
September	330,000
October	660,000
November	1,080,000
December	3,960,000
January	220,000

Mr. Jackson asks Ms. Truly to produce a report on the current state of the companys cash flows and short-term financing needs for a meeting next week. Ms. Truly wrote down the following tasks that must be completed prior to writing her report:

Construct the monthly cash collections table.

Construct the monthly cash disbursements table.

Calculate the monthly net cash inflow.

Construct the monthly cash budget.