Problem: Please explain how to do a cash budget for one quarter.
The following information is available for the Dixon Company for the first quarter of 2005.
|
|
Apr
|
May
|
Jun
|
|
Budgeted Receipts from Credit Sales
|
500,000
|
520,000
|
550,000
|
|
Budgeted Cash Sales
|
100,000
|
105,000
|
112,000
|
|
Budgeted Cash Payments
|
670,000
|
615,000
|
627,000
|
Beginning cash balance for April 2005 is expected to be $90,000. The company intends to maintain a cash balance of at least $50,000. The company has made arrangements to borrow from a local bank if necessary.
Required: Prepare a cash budget for the second quarter of 2005.