Berrington specializes in automobiles accessories and receives all income from sales. The sales estimates are as follows:

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Sales (in millions)

SAR 820

SAR 850

SAR 930

SAR 1,010

Projected sales in the first quarter of the following year is SAR 1,500 (in million)

Berrington Company has a beginning receivables of SAR345 million and the average collection period of 45 days.

The company purchases from suppliers in a quarter are equal to 50 percent of the next quarter's forecast sales. The payables period is 60 days. Wages, taxes, and other expenses are 28 percent of sales, and interest and dividends are SAR80 million per quarter. The capital expenditures are SAR250 million in quarter 2.

The initial cash balance is SAR75 million, and the company's policy is to maintain a minimum balance of SAR50 million.

You are required to:

a) Prepare the cash budget by completing the following schedules for Barrington Company.

b) Suggest how should Berrington manages its cash deficit.

Note: You are required to show your workings for cash collections and cash disbursement for quarter