The Ritz-Carlton has four hotels and resorts in the Caribbean and Mexico. For one of these hotels, management expects occupancy rates to be 95% in December, January, and February, 85% in November, March, and April, and 70% the rest of the year. This hotel has 300 rooms, and the average room rental is $290 per night. Of this, on average 10% is received as a deposit the month before the stay, 60% is received in the month of the stay, and 28% is collected the month after. The remaining 2% is never collected.

Most of the costs of running the hotel are fixed. The variable costs are only $30 per occupied room per night. Fixed salaries (including benefits) run $400 000 per month, depreciation is $350 000 a month, other fixed operating costs are $120 000 per month, and interest expense is $600 000 per month. Variable costs and salaries are paid in the month they are incurred, depreciation is recorded at the end of each quarter, other fixed operating costs are paid as incurred, and interest is paid each June and December.

REQUIRED:

Prepare a monthly cash budget for this Ritz-Carlton Hotel for the entire year. For simplicity, assume that there are 30 days in each month.