You just started your own small retail business and youre off to a bit of a rough start. Customers pay in cash only but youre having trouble paying your suppliers. Youre thinking of taking out a short-term loan, but you need to do a cash budget first to determine how much you should borrow. The terms for your purchases are net 30 days, so you pay your suppliers in the month following the purchase. You keep $5000 for yourself each month as salary and your rent is $1600. In addition, taxes of $11,000 are due in December. You have made an agreement with your bank to keep a balance of $7000 in your account. As of December 1, you have $200 cash on hand. Estimated sales and purchases for December, January and February are shown below. November purchases were $140,000.

Sales Purchases

December $140,000 $45,000

January $44,000 $45,000

February $54,000 $45,000

Compile a cash budget, including the collections-purchases worksheet, cash gain/loss for the month, and the loan requirement or cash surplus. SHOW WORK, will rate