The treasurer of Westmark Industrial, Inc., a wholesale distributor of household appliances, wants to estimate his companys cash balances for the first three months of 2017. Using the information below, construct a monthly cash budget for Westmark for January through March 2017. Westmarks sales are 25 percent for cash, with the rest on 30-day credit terms. Its purchases are all on 45-day credit terms. Does it appear from your results that the treasurer should be concerned about investing excess cash or looking for a bank loan?

Westmark Industrial selected information in $ thousands

2016 (Actual)

October: Sales 360, Purchases 510

November: Sales 420, Purchases 540

December: Sales 900, Purchases 850

2017 (Projected)

January: Sales 400, Purchases 150

February: Sales 300, Purchases 300

March: Sales 240, Purchases 120

Wages payable monthly 200

Principal payment on debt due in March 190

Interest due in March 75

Dividend payable in March 180

Cash balance on 1 January 2017 285

Minimum desired cash balance 175