Roche City has two major sources of revenues, prop-erty tax and sales tax, which are billed according to the schedule at the top of the next page. Traditionally, property tax revenues have been received in cash according to the following schedule:
40 percent one month following the billing date
20 percent in second month
10 percent in third month
10 percent in fourth month
8 percent in fifth month
5 percent in sixth month
7 percent are not collected
The state collects the sales tax revenues and will transfer cash to the city on March 1, 2014, for the sales tax revenues earned in the last quarter of 2013.
Roche City is not planning any capital asset purchases during the next three months. Monthly cash disbursements for general operations are $ 3,700,000. Beginning cash balance for January 1, 2014, is $ 500,000. Roche City will borrow to ensure that the ending cash balance each month is at least $ 100,000.
Use this information to prepare a monthly cash budget for Roche City for January, February, and March of 2014.

  • CreatedDecember 19, 2014
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