The purpose of the cash budget is to estimate cash flows, to help ensure sufficient cash balances are maintained during the planning period, and to plan for external financing during periods of cash deficits.

The following information is taken from XYZ Corporation company records:

Sales are anticipated to be $$750,000$ for the year, and consistent each month.

January $1$ cash balance is $$125,000.$

Cash collections are expected to be $85\%$ of sales in January through May, decreasing to $75\%$ of sales in June through September, and $80\%$ of sales in October through December.

Operating expenses are expected to be $$600,000$ in January through April, $$550,000$ in May through August, and $$625,000$ in September through December.

Management has set a monthly target cash balance of $$225,000.$

Beginning Cash Balance

Cash Collections

Cash Disbursements

Net Cash Flow

Preliminary Ending Cash Balance

Less: Minimum Cash Balance

Cash Surplus $($Deficiency$)$

Ending Cash Balance