The Miami An Museum (MAM) is concerned about how much cash it will have on hand when the new gallery opens. It is hoping to have extra cash on hand in case any unforeseen expenses arise due to the new gallery. MAM's cash inflows and outflows are as follows: AU salary and utilities and other fixed costs are paid when they occur.
• MAM makes its rent payments at the end of every six months for the previous six months. • Educational materials for visitors are paid for one quarter in advance.
• Visitor donations are removed from the collection boxes at the end of each business day and deposited in the bank.
• Individual donations from mail and telephone solicitations are received approximately one month after they have been pledged. Over the past two years these donations have remained steady at $10,000 a month.
• Of the foundation grants, two foundations will send MAM grant checks of $60,000 each in the first quarter. Another foundation will send its $60,000 grant in the second quarter. Finally, one of the foundation grants for the new gallery will be paid in the second quarter.
• The Miami Art Museum will start the new fiscal year with a beginning cash balance of S10,000.
Required:
a). Create a quarterly cash budtet for the find two quarters of MAM's 2008 fiscal year Assume there are three months in each quarter.
b). Will MAM have a positive ending cash balance in quarter two?