The projected sales of Sharp Corporation for the first 8 months of 2019 are shown in the table below.

Of Sharp’s sales, 12 percent is for cash, another 58 percent is collected in the month following the sales, and 30 percent is collected in the second month following sales. November and December 2018 sales were \($225,000\) and \($180,000,\) respectively.
Sharp purchases its raw materials 2 months in advance of its sales. The purchases are equal to 50 percent of the final sales price of Sharp’s products. The supplier is paid 1 month after it makes a delivery. For example, purchases for April sales are made in February, and payment is made in March.
In addition, Sharp pays \($12,000\) per month for rent and \($23,000\) each month for other expenditures. Tax prepayments of \($24,500\) are made each quarter, beginning in March.
The company’s cash balance on December 31, 2018, was \($24,000\) . This is the minimum balance the firm wants to maintain. Any borrowing that is needed to maintain this minimum is paid off in the subsequent month if there is sufficient cash. Interest on shortterm loans (12 percent) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \($59,500,\) these funds would be borrowed at the beginning of April with interest of \($595\) (0.12 × 1/12 × \($59,500)\) owed for April and paid at the beginning of May.

a. Prepare a cash budget for Sharp covering the first 7 months of 2019.

b. Sharp has \($205,000\) in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?

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January February $195,000 128,000 March 139,000 April 245,000 $305,000 May June 273,000 July 227,000 August 154,000