Question Two

Investec Company is planning its cash needs for the fourth quarter.

The following information has been assembled to assist in preparing a cash budget for the quarter:

The Total cash collections and disbursement for purchases are as follows (All amounts are in dollars):

	Oct.	Nov.	Dec.
Total Cash collections	46,500	49,760	59,600
Total Cash disbursed for purchases	36,000	36,750	30,375

Selling and administrative expenses will be incurred and paid as follows:

Selling expenses	7,200	11,700	8,000
Administrative expenses	5,600	7,200	6,100

Land costing $4,500 will be purchased in October.

Dividends of $1,000 will be declared and paid in November.

The cash balance on October 1st is $10,000.

The company must maintain a cash balance of at least $15,000 at the end of each month.

The interest rate on the loans is 12% per year. The companys policy is to repay the loan plus accumulatedinterest at the end of the quarter.

Required: (Use rounding-off when it is needed):

Prepare a Cash Budget for October, November and December