CASE 2 (20 points)

Here are some important figures from the budget of Willy Corporation for the third quarter of 2021:

All credit purchases are paid in the month after the purchase.

Instructions:

a) Using the above information, complete the following cash budget. Show separately your calculations for cash collections and payments for purchases. (15 points)

	July	August	September
Beginning cash balance	?	?	?
Cash receipts:
Cash collections from credit sales	?	?	?
Total cash available	?	?	?
Cash disbursements:
Payments for purchases	?	?	?
Wages, taxes, and expenses	?	?	?
Interest	?	?	?
Equipment purchases	?	?	?
Total cash disbursements	?	?	?
Ending cash balance	?	?	?

b) Explain the role of cash budget. (5 points)