Prince Charles Island Company has expected sales of $6,000 in September, $10,000 in October, $16,000 in November, and $12,000 in December. Cash sales are 20 percent and credit sales are 80 percent of total sales. Historically, 40 percent of receivables are collected in the month after the sale, and the remaining 60 percent collected two months after.

Assume that the companys cash payments for November are $13,000, and December $6,000. The beginning cash balance in November is $5,000, which is the desired minimum balance.

a. Prepare a cash receipts schedule for November and December.

Prince Charles Island Company Cash Receipts Schedule
	September	October	November	December
Sales	$	$	$	$
Credit sales
Cash sales
Collections in the month after credit sales
Collections two months after credit sales
Total cash receipts			$	$

b. Prepare a cash budget with borrowing needed or repayments for November and December. (Do not leave any empty spaces; input a 0 wherever it is required. Amount to be deducted should be indicated with minus sign.)

Prince Charles Island Company Cash Budget
	November	December
Cash receipts	$	$
Cash payments
Net cash flow
Beginning cash balance
Cumulative cash balance
Monthly loan or (repayment)
Cumulative loan balance
Ending cash balance	$	$