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    Cash Budget Problem

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    Complete the following --use the attached spreadsheet template and fill in the blanks (send back as a reply to this note in this, the main newsgroup:

    CASH BUDGETING PROBLEM

    Norman Larson, a recent graduate of University of Phoenix with huge potential, has accepted a position as an entry level accountant with Builders R Us Manufacturing Company. The president of the company, U. R. Wright , has requested Norman to provide him with a cash flow for the period of April 30 to June 30, which happens to be the end of the current fiscal year. The following information is available:

    All sales are credit sales, with 20% of sales collected in the month of sales, 60% collected in the month following sales, 15% collected in the second month following the sale, and the remaining 5% written off as bad debt losses in the sixth month following the sale. Raw materials purchased each month are 75% of the next month?s sales. Payment for raw materials is made during the month after the purchase. Norman is required to maintain a minimum balance of $5,000 in the checking account, and the balance on April 1st is $6,000. Rent, insurance, and other expenses are $1,000 per month.

    Sales and wage data are as follows:

    ACTUAL

    Sales
    Wages

    February
    $ 30,000
    $ 3,000

    March
    $ 30,000
    $ 3,000

    ESTIMATED

    Sales
    Wages

    April
    $ 30,000
    $ 3,000

    May
    $ 40,000
    $ 4,000

    June
    $ 50,000
    $ 5,000

    July
    $ 60,000
    $ 6,000

    August
    $ 50,000
    $ 5,000

    September
    $ 40,000
    $ 4,000

    Prepare the cash budget for the period April 30 through June 30. For any month during which a cash shortage is indicated, assume that the Friendly Online National Bank will make funds available. Use the budget worksheet provided to solve the problem.

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    https://brainmass.com/business/cash-budgeting/cash-budget-problem-147884

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