Question

A firm has the following monthly pattern of sales:
January.......... $ 100
February.......... 300
March .......... 500
April .......... 1,000
May .......... 500
June .......... 300
Sixty percent of the sales are on credit and are collected after a month. The company pays wages each month that are 60 percent of sales and has fixed disbursements (for example, rent) of $100 a month. In March it receives $200 from a bond that matures; in April and June it makes a tax payment of $200. Management maintains a cash balance of $150 at all times. Construct a cash budget that indicates the firm’s monthly needs for short-term financing. Its beginning cash position is $150.


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  • CreatedMarch 19, 2015
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