Cash budget : basic Farmer Delight corporation reported sales of $350,00 in june, $380,00 in july, and $390,000 in agust. The forecats for sepetember, october, november are $385,000, $418,000, and $429,000, respectively. The initial cash balance on september is $150,000 and minimum of $8,000 shouldbe kept. Use the given information to compile a cash budget for the months of september, october, and november.
1. Farmer Delight predict that 5% of its sales will never be collected, 30% of its sales will be cash sales, and the remaining 65% will be collected in the following month
2. Farmers delight recevies other monthly income of $3,000
3. The actual or expected purchase are $150,000, $120,000, and $115,000 for the months of september to november, respectively, and 50% are paid in cash while the remainder is paid in following month. The purchases for agust were $ 120,000
4. Monthly rent is $3,500 chargeable only in october and november
5. Wages and salaris are 12 % of the previous months sales
6. Cash dividends of $4,600 are declared and will be paid in september
7. Long-term loan repayment of principal and interest of $4,700 is due in october
8. Additional equipment costing $8,500 is ordered and scheduled to be paid for in cash in november
9. Taxes of $8,250 are due in november