You have recently been hired by Bettys Sweet Treats to work in the newly established treasury department. Bettys Sweet Treats is a small company that produces deserts and cakes for different occasions. Betty Winston, the owner of the company, works primarily in the sales and production areas of the company. Currently, the company puts all receivables in one shoe box and all payables in another. Because of the disorganized system, the finance area needs work, and thats what youve been brought in to do.

The company currently has a cash balance of $65,000, and it plans to purchase new machinery in the second quarter at a cost of $25,000. The machinery will be purchased with cash because of a discount offered. The companys policy is to maintain a minimum cash balance of $75,000. All sales and purchases are made on credit.

Betty Winston expects the following gross sales for each of the next four quarters:

Q1	Q2	Q3	Q4
$ 110,000	$ 135,000	$ 145,000	$ 130,000

Also, gross sales for the first quarter of the next year are projected at $120,000. The company currently has an accounts receivable period of 36 days and an accounts receivable balance of $41,000. Five percent of the accounts receivable balance is from a company that has just entered bankruptcy, and it is likely this portion of the accounts receivable will never be collected.

Winston typically orders 45 percent of next quarters projected gross sales in the current quarter, and suppliers are typically paid in 27 days. Wages, taxes, and other costs run about 25 percent of gross sales. The company has a quarterly interest payment of $10,000 on its business loan.

Betty has asked you to prepare a cash budget for the company under the current policies. Please Use the numbers given to complete the cash budget.

Beginning cash balance
Investment outlay in second Q
Target cash balance
	Q1	Q2	Q3	Q4
Gross sales
Sales (1st quarter of next year)
Collection period
A/R
Percent uncollectible
% of purchases for next Q sales
Suppliers paid
% of sales for expenses
Interest
Output Area:
	Q1	Q2	Q3	Q4
Sales	$ -
Total credit purchases	$ -
	Q1
A/R at beginning of Q collected	$ -
Sales collection in current Q	-
Purchases in last Q paid this Q	-
Purchase in current Q paid this Q	-
Expenses	-
Interest and dividends	-
Outlay
Net cash inflow	$ -
Cash Balance
	Q1	Q2	Q3	Q4
Beginning cash balance	$ -
Net cash inflow	-
Ending cash balance	$ -
Minimum cash balance	-
Cumulative surplus (deficit)	$ -