Use the following information to complete the quarterly cash budget. Please be sure to read all instructions very carefully.

Jazzy Pet Treats, Inc. specializes in gourmet pet treats and receives all income from sales

Sales estimates (in millions, round all line items to the nearest million, except, in Stage 2 when you get to the $162.5 value, round one up and one down of course)

Q1 = 500

Q2 = 600

Q3 = 650

Q4 = 800

Q1 next year = 550

Accounts receivable

Beginning receivables = $250

Average collection period = 30 days

Accounts payable

Purchases = 50% of next quarters sales

Beginning payables = 125

Accounts payable period is 45 days

Other expenses

Wages, taxes, and other expense are 30% of sales each quarter

Interest and dividend payments are $50 each quarter

A major capital expenditure of $200 is expected in the second quarter

The initial cash balance is $80, and the company maintains a minimum balance of $50

In order to maintain the balance, you may need to borrow short term funds, but whatever you do borrow is only for that one quarter

Use a standard Accounting Calendar, 360 days per year, 90 per quarter, 30 per Month

Meaning, a 30 day delay is a 1/3 quarter delay, 45 day delay is a 1/2 quarter delay

Stage 1: Cash Collections

ACP = 30 days; this implies that 2/3 of sales are collected in the quarter made and the remaining 1/3 are collected the following quarter

Beginning receivables of $250 will be collected in the first quarter

Start by working down the Quarter 1 column, then Q2 and so on

	Q1	Q2	Q3	Q4
Beginning Receivables	250	167
Sales			650
Cash Collections
Ending Receivables	167			267