Question 3 Cash Budgeting

Henrys forecasted data is as follows:

	June	July	August	September	October
Credit Sales	360,000	330,000	300,000	390,000	660,000
Credit Purchases	210,000	240,000	180,000	270,000	600,000

From past experience Henrys has found that Accounts Receivable pay as follows:

60% in the month the sale

30% in the month following the sale

8% two months after the sale

2% are never collected (become bad debts).

It is Henrys policy to pay Accounts Payable in the month following the credit purchase.

Cash payments for operating expenses in October are expected to be $144,000.

Required

Prepare a Cash Budget for Henrys for October.