You are planning next month's operations and have gathered the following past and projected sales data:
December $ 160,000
January 220,000
February 230,000
March 120,000
50% of sales are cash sales. Of the remaining credit sales, 20% are collected in the month of sale, 60% in the first month following the sale, and the remaining 20% in the second month following the sale. Purchases of inventories average 70% of sales, are made one month in advance of sales, and are paid for in the month following their acquisition. Staff salaries are $7,500 per month. Sales commission costs average 10% of sales and are paid when incurred (i.e., in the month of sale). Monthly rent is $2,500 and the depreciation expense for February is $1,000. The Board of Directors will declare a quarterly dividend of $2,000 payable at the end of February. The tax rate is 21% and second quarter fiscal year tax estimates of $13,500 are payable February 15. Equipment costing $14,000 will be purchased on February 28.
Prepare a cash budget for February indicating the surplus (deficit) of cash as of February 28. The cash balance as of January 31 is $22,000.