Eagles Limited needs a cash budget for the month of November. The following information is available:
The cash balance on November 1 is $5,000.
Sales for October and November are $80,000 and $60,000, respectively. Cash collections on sales are 30 percent in the month of sale and 68 percent in the month after the sale; 2 percent of sales are uncollectible.
General expenses budgeted for November are $26,000 (depreciation represents $2,000 of this amount).
Inventory purchases will total $30,000 in October and $40,000 in November. The company pays for half of its inventory purchases in the month of purchase and for the other half the month after purchase.