Q7 "Cash Budget Sales Forecasts (in ooo's) $2,000 Oct. Year 1 $2,500 May S 1.500 $3,000 Jun $5,000 $2,500 Jul $4,000 Jan, Year 2 $2,000 900 Feb 1.200 Mar Credit Terms 2110, Net 30. Payment patterns: 50% of customers take discount and pay in month of sale. 30% of customers pay following month. 20% of customers pay in 2nd month after sale. Purchase 75% of sales month 20% of sales the following month. ne Firm pays for purchse on the month of purcahse and take discount. $1,000 cash on hand (as of 12/01 Year 1) 1,000 Monthly target cash balance Other expenses: 20% of sales of the same month Wages/Admin. & Selling 1,200 per month. Depreciation Jan 1.000 Income tax pmt Jun 1,000 Spring Advertisement campaign 2000 Payment: Dec. Year 1: 200 Mar, Year 2