Answer Happy

Sheet1 Sheet2 January February March Sales Purchases 160,000 30,000 40,000 40,000 60,000 60,000 Payments 40,000 Receipts 10% A/R Current Month and take discount 70% A/R (next month) 20% A/R (2nd following month) Payments: Purchases Salaries Rent Total payments Net gain/loss Cash at start of month Cumulative cash balance Target cash balance Cumulative surplus/loan needed

Cash Budget Exercise Jones Stationery has estimated the Sales Forecast as follows: January $160,000 February $ 40,000 March $ 60,000 Sales terms are: 1/10 net /30 Estimates regarding collections are: 10% will pay in the month of sale 70% will pay the month following the sale 20% will pay in the 2nd month following the sale Purchases are estimated to be and are paid the next month: January $ 30,000 February $ 40,000 March $ 60,000 Other expenses: Rent Salaries $2,000 each month $5,000 each month The Cash on Hand on Mar 1, 2015 is $1,000 A minimum cash balance of $6,000 is to be maintained. Required: 1. Prepare the Cash Budget for March. 2. What is the cash surplus or loan required?