Problem #2

Please prepare a cash budget for the Maliwan Co. for the month of April based on the following information:

-Estimated cash balance at the end of March was $ 200,000

-April's depreciation will be $50,000

-Taxes which will be paid in June are $175,000

-April's payroll will be $90,000

-April had insurance expense in April of $40,000 while insurance costs for the entire year were prepaid in January.

-April's operating expense are $75,000

-Collections of sales are as follows: 50% in the month of the sale, 30% in the following month, and 20% in the next month.

-Receivables balance as of the end of March is $400,000 ( $300,000 relating to March, $100,000 relating to February ).

-Sales for the month of April are forecasted to be $900,000

-Merchandise purchases are paid as follows: 50% in the month of the purchase, 25% in the next month, and 25% one month later.

-Purchases for March and February were $300,000 and $250,000 respectively and April's purchases are estimated to be $200,000