Cash Budget for Ritewell Publishers
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The following data are from the budget of Ritewell Publishers. Half the company's sales are transacted on a cash basis. The other half are paid for with a 1-month delay.
The company pays all of its credit purchases with a 1-month delay. Credit purchases in January were $30 and total sales in January were $180.
February March April
Total sales 200 220 180
Cash purchases 70 80 60
Credit Purchases 40 30 40
Labor and administrative exp 30 30 30
Taxes,interest, and dividends 10 10 10
Capital expenditures 100 0 0
What is the cash budget February March April
Sources of Cash
Collections on current sales
Collections on AR
Total sources of cash
Uses of Cash
Payments of accounts payable
Cash Purchases
Labor and administrative expenses
Capital expenditures
Taxes,interest and dividends
Total use of cash
Net cash inflow
Cast at start of period 100
+net cash inflow
=cash at end of period
+ min operating cash balance 100 100 100
=cumulative short-term financing required
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The solution prepares Cash Budget for Ritewell Publishers.
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