Problem 3 Prepare the Cash Budget for Beachside Resort for January to March. Use the following information to formulate a simplified cash budget for The Best Value Hotel: Dec Jan Feb Mar Sales $50,000 $50,000 $60,000 $80,000 Inventory Purchase 17,000 20,000 22,000 35,000 Other Cash Expenses 16,000 16,000 25,000 40,000 Capital Purchase with Cash 0 0 15,000 0 Sales: 70% of the sales are cash while the remaining 30% are credit sales. One half of the credit sales are collected in the month of sale and one half in the next month. Purchases: 85% of the purchases are paid in the month of the purchase while 15% are paid in the next month. Inventory: assume that other cash expenses and capital purchased with cash are paid for during the month indicated above. January 14, the cash opening balance is $6,000. Required: 1. Show all your calculation with subheading of January, February, and March. 2. Prepare a cash budget statement with the proper heading and list of accounts. Answer: The Best Value Hotel Cash Budgeting January-March Cash--beginning of January February March month Estimated cash receipts: Cash Sales Collection of accounts receivable Estimated cash available Estimated cash disbursements: Inventory purchases Other cash expenses Capital purchase Total Cash--end of month