Your friend Susan owns a small business and wants you to help her prepare a Cash Budget. Her business sells wet premium cat food for $25 per can. Although it is considered very expensive, she has done a great job marketing her product and is able to charge a premium price. The following are the number of cans the company plans to sell over the next few months

Nov	Dec	Jan	Feb	Mar	Apr	May	June
2,400	2,560	2,600	2,800	2,900	3,050	3,200	3,150

Susan provides you with the following information to complete your analysis.

There are only 3 retail stores that sell the product: Pet Value, Amazon, and Pet Smart. Half of the sales are paid in the month they are realized, and these awarded a 5% discount. The other half the sales are paid the following month in full.

The company purchases its inventory at a 25% mark up to sales (hint: divide sales by 1.25 to get purchase figure). Half of the purchases are paid for in the month of purchase and a 4% early payment discount. The remainder is paid in full in the following month.

The company employs 4 workers each making $3,000 per month, and wages are paid in the month they are earned. As a result of Susan’s recent success, she will be increasing wages for all her employees by 10% beginning in March.

The company pays rent of $15,000 every 3 months beginning in January, April, July, and December.

Susan has arranged for a $60,000 loan from her bank. Her account will be credited with this in February.

The company will have $12,000 as their bank balance as of December 31, 2021

Susan would like you to prepare a Cash Budget beginning in January until May 2022. In April 2022, the company is looking to purchase some additional equipment to process the pet food. This equipment is expected to cost $40,000. Will the company have enough cash on hand to make the purchase?

Describe two borrowing options available for organizations to turn their Accounts Receivable into Cash.