Problem 1. On a separate sheet of paper, prepare a cash budget for the first four months of 2006, showing the amount of cumulative excess cash (loan balance). Basic company has planned a cash budget for the first four months. Estimates show that P60,000 should be collected in January and April for the dividends to be received from investments in stock of other companies. Each month, operating expenses for wages, rents, lights and others estimated to be P100,000 plus 10% of the preceding month sales. Sales and collections on accounts receivables are estimated as follows: 50% collected in the month of sale 30% collected in the month following the sale 20% collected in the second month following the sale Payments for the merchandise purchased are scheduled so that 60% of the payments are made in the month of purchase with the balance paid the following month. The cash balance is estimated at P175,000 for January 1, 2006. Estimated net sales and purchases for the months are as follows: Net Sales Purchases November P 560,000 P 320,000 December 550,000 380,000 January 2006 640,000 420,000 February 700,000 400,000 March 650,000 350,000 April 580,000 280,000 An income tax payment of P75,000 is to be made in January and final payment of P100,000 is to be made in April. A loan repayment of P100,000 with P10,000 interest added will be made in February. Capital asset acquisition is scheduled for January for P100,000 and in March for P125,000. A minimum cash balance of P150,000 must be maintained at the end of each month. Amounts at bundles of P10,000 can be borrowed to finance any shortages which is assumed to be made at the beginning of every month. Interest per month is 2%. Interest and principal amount is paid at the end of the period