Using the data below (in US $), draw a Cash Budget for Alma Corp.

1. Budgeted Sales Data:

June

July

August

Cash sales

90,000

215,000

185,000

Credit sales

135,000

145,000

90,000

• Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month.

2.Budgeted Purchase data:

June

July

August

Purchases

300,000

250,000

105,000

• Purchases of inventory are all on credit and 50% is paid in the month of purchase and 50% in the month following purchase.

3.Other Cash payments:

• Selling expenses are $48,000 each month,
• Rent for the period July-Dec -- will be paid in July - $103,000
• Purchase of equipment in August for $50,000 cash.

4.Other data:

• The company wishes to maintain a minimum cash balance of $40,000 at the end of each month.
• The company borrows money from the bank if necessary to maintain the minimum cash balance. $150 interest was paid in August.
• Borrowed money is repaid in months when there is an excess cash balance.
• The beginning cash balance on July 1 was $50,000.

Cash collection on credit sales:

June

July

August

Credit sales

Totalcollection

Cash disbursement for purchase of inventory:

June

July

August

Purchases

Total payments

Alma Corp.

Cash Budget

July & August

July

August

Beginning Cash balance

Add: Cash Collections:

Total Cash available

Less: Cash Disbursements /Payments

Total Cash Disbursements / Payments

Excess / (Deficiency) of Cash

Financing

Total Financing

Ending Cash Balance