Wilson Company has $11,000 in cash on hand on January 1 and has collected the following budget

Question:

Wilson Company has $11,000 in cash on hand on January 1 and has collected the following budget data:

January February $ 1,400,000 851,420 $ 710,000 871,800 Sales Cash receipts from customers Cash payments for merchandise

Assume Wilson has cash payments for selling and administrative expenses including salaries of $55,000 plus commissions of 2% of sales, all paid in the month of sale. The company requires a minimum cash balance of $8,500. Prepare a cash budget for January and February. Will Wilson need to borrow cash by the end of February?

Cash Budget
A cash budget is an estimation of the cash flows for a business over a specific period of time. These cash inflows and outflows include revenues collected, expenses paid, and loans receipts and payment. Its primary purpose is to provide the...