problem: Eddie's Bar & Restaurant Supplies expects its revenues & payments for the first part of the year to be:
|
|
January
|
$14,000
|
$18,000
|
|
February
|
20,000
|
21,300
|
|
|
March
|
26,000
|
19,100
|
|
|
April
|
22,000
|
22,400
|
|
|
May
|
18,000
|
14,700
|
|
70% of the company's sales are on credit. Past experience shows that 40% of accounts receivable are collected in the month after sale, & remainder is collected in 2nd month after sale. Make a schedule of cash receipts for March, April, & May. Eddie's pays its payments in following month. Eddie's had a cash balance of $2,000 on March 1, which is also its minimum required cash balance. There is an outstanding loan of $2,000 on March 1. Make a cash budget for March, April, & May.