Question: Eddie's Bar and Restaurant Supplies expects its revenues & payments for the 1st part of the year to be:
70% of the company's sales are on credit. Past experience shows that 40% of accounts receivable are collected in the month after sale, & the remainder is collected in the 2nd month after sale. Create a schedule of cash receipts for March, April and May. Eddie's pays its payments in the following month. Eddie's had a cash balance of $2,000 on March 1, which is also its minimum needed cash balance. There is an outstanding loan of $2,000 on March 1. Create a cash budget for March, April, and May.