Kenneth Austin, chief financial officer of ReMax Wireless, is responsible for the company's budgeting process. Austin's staff is preparing the ReMax cash budget for 20X7. A key input to the budgeting process is last year's statement of cash flows, which follows (amount in thousands):

ReMax Wireless

Statement of Cash Flows

20X6

(In thousands)

Cash Flows from Operating Activities

Collections from customers........................................ $ 60,000

Interest received......................................................... 100

Purchases of inventory............................................... (44,000)

Operating expenses.................................................... (13,900)

Net cash provided by operations............................ 2,200

Cash Flows from Investing Activities

Purchases of equipment.............................................. (4,300)

Purchases of investments............................................ (200)

Sales of investments................................................... 400

Net cash used for investing activities...................... (4,100)

Cash Flows from Financing Activities

Payment of long-term debt......................................... (300)

Issuance of stock........................................................ 1,200

Payment of cash dividends......................................... (500)

Net cash provided by financing activities............... 400

Cash

Increase (decrease) in cash..........................................(1,500)

Cash, beginning of year.............................................. 2,700

Cash, end of year....................................................... $ 1,200

Required

1. Prepare the ReMax Wireless cash budget for 20X7. Date the budget simply "20X7" and denote the beginning and ending cash balances as "beginning" and "ending." Assume the company expects 20X7 to be the same as 20X6, but with the following changes:

a. In 20X7, the company expects a 15% increase in collections from customers and a 20% increase in purchases of inventory.

b. There will be no sales of investments in 20X7.

c. ReMax plans to issue no stock in 20X7.

d. ReMax plans to end the year with a cash balance of $2,000 thousand.