Your projected sales for the first three months of next year are as follows: January, $15,000; February, $20,000; and March, $25,000. Based on last year’s data, cash sales are 20 percent of total sales for each month. Of the accounts receivable, 60 percent are collected in the month after the sale, and 40 percent are collected in the second month following the sale. Sales for November of the current year are $15,000 and for December $17,000. You have the following estimated payments: January, $4,500; February, $5,500; and March, $5,200.
a. Using the format from the pro forma cash budget in Table 6-8, what is your monthly cash budget for January, February, and March?
b. What will your accounts receivable be for the beginning of April?
c. Will your company have any borrowing requirements for any month during this three-month period?

  • CreatedJuly 31, 2015
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