Glenn Stone, manager of Jarrett Car Repairers, has requested that you prepare a cash budget for the months of December and January. He has provided the following information to assist in this task.
• Projected cash balance at the end of November is $60000.
• Actual revenue for October and November and projected revenue for December and January are as follows.

• Analysis of past records shows that credit sales are collected over a three-month period, with 50 per cent being collected in the month of the sale, 40 per cent in the next month and the remainder in the following month.
• Projected expenditure during December and January is as follows.
– Selling and administrative expenses are budgeted to be $88000 each month.
– A new car hoist will be purchased for $100000, with a $20000 cash payment in December and the balance to be paid in March.
– Glenn wants to maintain a minimum cash balance of $60000.

• As more customers will want their vehicles serviced prior to Christmas, the consumables store will need more supplies. Accordingly, an order has been placed for $60000 of inventory. This will arrive in late November and be paid in December.

Required
(a) Prepare a schedule showing receipts from customers for the credit sales.
(b) Prepare a cash budget for December and January.
(c) Prepare a report for Glenn outlining his cash position over the Christmas period. Give advice regarding any financing requirements or investment opportunities.

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Cash sales Sales on credit Total sales October $ 63 000 90 000 $153 000 November $ 61000 110000 $171 000 December $ 72000 130 000 $202 000 January $ 60000 80 000 $140 000