Problem:
Lansing Auto Parts, Inc. has projected sales of $25,000 in October, $35, 000 in November, and $30,000 in December. Of the company's sales, 20 percent are paid for in cash, and 80 percent are sold on credit. The credit sales are collected one month after the sale. Determine collections for November and December. Also assume that the company's cash payment for November and December are $30,400 and $29,800 respectively. The beginning balance in November is $6,000, which is the desired minimum balance. Prepare a cash budget with borrowing needed or repayments for November and December.
Find attached, a formatted MS Excel spreadsheet containing an illustrative example on the creation of a cash budget schedule.