On the separate sheet provided, prepare in good form, with a proper heading, and without abbreviations or scratch outs, a Cash Budget for the month of January, 2021.

StartUp Company has asked you to make a cash budget for January 2021, using the following information:

Actual cash balance at December 31, 2019, $2,000

Projected cash balance at December 31, 2020, $3,000

Minimum cash balance desired January 31, 2021, $8,000

Minimum cash balance desired December 31, 2021, $4,000

Projected transactions in January are:

Cash collections from sales . . . . . . . . . . . . . . . . . . . . . . . . $ 40,000

Purchases of merchandise inventory . . . . . . . . . . . . . . . . . 10,000

Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,000

Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000

Depreciation of building and equipment . . . . . . . . . . . . . . 18,000

Purchases of store equipment . . . . . . . . . . . . . . . . . . . . . . . 17,000

Declaration of a dividend (to be paid in February) . . . . . . 11,000

Amortization of patent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000

Where a projected transaction involves a cash outlay, unless otherwise noted the cash will be paid in January.

The company has a line of credit at the bank, which allows borrowing up to $100,000, and currently has $25,000 in loans from the bank that were taken out on October 1, 2017. Interest at 10% is paid annually on December 31 of each year.