The Amber Magick Shoppe has forecast its sales revenues and purchases for the last 5 months of 200x to be as follows:

60% of sales are on credit. On the basis of past experience, 50% of the accounts receivable are collected the month after the sale and the remainder are collected 2 months after the sale. Purchases are paid 30 days after they are incurred. The firm has a cash balance of $5,000 on hand as of October 31, and its minimum required cash balance is $4,000
a) Prepare a schedule of cash receipts for October, November and December.
b) Prepare a cash budget for the same period.

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Sales Purchases August $22,000 17,000 Septembe 15,000 25,000 30,000 19,500 29,000 20,000 24.000 October November ovember 30.000 December 26,000