RULE 2. Case Budget for a Small Department Store Assumption 12 Cash balance on December 31 i $12,000 Minimum cash balance is $10.000 Sales are 75 credit and 25 cash Credit sales are collected in the following manner * 60% collected in the first month after the sale 30 collected in the second month after the sale 54 collected in the third month after the sale *5% are never collected Sales forecasts are as follows: Pessimise October (actual November (actual) December (actual) January 120.000 February March 14 15 Most likely 5.300.000 350,000 400,000 150.000 200.000 200,000 300.000 315.000 320,000 160,000 160,000 250,000 260,000 265.000 April May June 175.000 250.000 250,000 340,000 360,000 375.000 Rent is $3,000 per month Interest payments of $661 and 5817 are due in April and May, respectively. A tax prepayment of $18,000 is due in March, A capital addition payment of $130,000 is due in February A banknote payment of S7,500 is due in March Insurance premiums are $475 per month Other expense estimates include: mary February Purchases $ 140,000 140,000 210,000 185.000 190.000 180,000 Wapes and Salaries $ 30,000 38.000 40,000 42.000 44,000 44.000 Utilities $ 1450 1,400 1.250 1.250 Advertising $1,600 1.600 1.500 Miscellaneous $ 500 SOO 500 350 2.200 550 36 A . Cash Budget for a Small Department Store - Most Likely Sales Forecast Oct Nov Dec Jan Feb Mar Apr Cash Receipts Sales Credit Sales Collections: 60% - First month after sale 30% - Second month after sale 5% - Third month after sale Cash Sales Other cash receipts Total Cash Receipts 15 16 17 18 19 Cash Disbursements Purchases Rent Utilities Bank Note Tax Repayment Capital Additions Wages and Salaries Insurance Advertising Interest Miscellaneous Total Cash Disbursements 25 28 End-of-Month Balance Beginning Cash Balance Cash receipts - Cash disbursements Cash (end-of-month) Borrowing Repayment - Q + Final Cash Balance