Q1) Roche City has 2 main sources of revenues, property tax and sales tax, that are billed according to schedule given below:
| 2005 |
Property Tax |
Sales Tax |
| July |
---- |
50,000 |
| Aug |
---- |
55,000 |
| Sept |
45,000,000 |
62,000 |
| Oct |
---- |
50,000 |
| Nov |
---- |
68,000 |
| Dec |
---- |
112,000 |
Traditionally, property tax revenues have been got in cash according to following schedule:
40% one month following the billing date
20% in second month
10% in third month
10% in fourth month
8% in fifth month
5% in sixth month
7% are not collected
State collects sales tax revenues and will transfer cash to city on March 1, 2006 for sales tax revenues earned in last quarter of 2005. Roche City is not planning any capital asset buys in next three months. Monthly cash disbursements for general operations are $3,700,000. Starting cash balance for January 1, 2006, is $500,000. Roche City will borrow to make sure that ending cash balance each month is at least $100,000. Use this information to make monthly cash budget for Roche City for Jan, Feb, and March of 2006.