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The treasurer of Gateway Co. has accumulated the following budget information for the first two months of the coming year: March April Sales $450,000 $520,000

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The treasurer of Gateway Co. has accumulated the following budget information for the first two months of the coming year: March April Sales $450,000 $520,000 Inventory costs 290,000 350,000 Operating expenses 41,400 46,400 Capital expenditures 250,000 March 1 Cash balance 45,000 Accounts Receivables-March 1 51,000 Accounts Payable-March 1 121,500 ($102,000 for inventory purchases and $19,500 for operating expenses) The company expects to sell about 35% of sales for cash Of sales on account, 80% are expected to be collected in full in the month of the sale and the remainder in the month following the sale. One fourth of the inventory costs are expected to be paid in the month in which they are incurred and the other three fourths in the month following Depreciation, insurance, and property taxes represent $6,400 of the total budgeted monthly operating expenses. Insurance is paid in February and a $40,000 installment on property taxes is expected to be paid in April. Of the remainder of the operating expenses, one half are expected to be paid in the month in which they are incurred and the balance in the following month. Capital expenditures of $250.000 are expected to be paid in March Management desires to maintain a minimum cash balance of $35,000. Any borrowings would be paid off in the next month. Interest would not be paid until after April. REQUIRED: Prepare a monthly cash budget in good form for the month of March and the related schedules shown below. Show all calculations clearly to receive full marks. a) Schedule of Cash collections for the month of March b) Schedule of Cash disbursements for March Inventory purchases c) Schedule of Cash disbursements for Operating expenses-Month of March d) Gateway Company Cash Budget Month of March

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