Aizel Joy A.

Tampos 12- ABM A February 5, 2017

Cash Budget
Sales in August and September were 325,000.00 and 260,000.00, respectively. Sales of
315,000.00, 365,000.00 and 390,000.00 have been forecasted for October, November and
December, respectively. Thus, we are trying to develop a cash budget for October to December.
Based on historical data, 25% of the business sales are in cash form, 30% have generated
accounts receivables collected after one month, and the remaining 45% have generated accounts
receivables collected after two months. It also receives a monthly interest of 100,000 from a bank

Sales August September October November December

Forecast
325,000.00 260,000.00 315,000.00 365,000.00 390,000.00
Cash Sales 81,250.00 65,000.00 78,750.00 91,250.00 97,500.00
(25 % )
Accounts
Receivables
Collections
Lagged 1 97,500.00 78,00.00 94,500.00 109,500.00
month
Lagged 2 117,000.00 141,750.00 165,250.00
months
Other Cash 120,000.00 120,000.00 120,000.00 120,000.00 120,000.00
Receipts
Total Cash 201,250.00 282,500.00 393,750.00 447,500.00 491,250.000
Receipts
certificate of deposit.

Purchases represent 75% of sales. Of this amount, 10% is paid in cash, 75% and 15%
are paid after one month and two months, respectively. After the purchase, the business also
pays a rent of 20,000 every month.

Wages are 3% of monthly sales. On the other hand, fixed salary cost for the year is
120,000, or 10,000 per month.

Taxes of 50,000 will be paid in October while capital expenditure in the form of new
machinery costing 120,000 will be purchased and paid in full in September.

Furthermore, an interest payment of 100,000 is due every month. A 140,000 principal

payment is also due in November.
 August September October November December
Purchases 243,750.00 195,000.00 236,250.00 273,750.00 292,500.00
Cash 24,375.00 19,500.00 23,625.00 27,375.00 29,250.00
Purchases
Accounts
Payable
Payment
Lagged 182,812.50 146,250.00 177,187.50 205,312.50
1 month
Lagged 29,250.00 35,437.50 41,062.50
2
months
Rent Payments 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
Wages and 19,750.00 17,800.00 19,450.00 20,950.00 21,700.00
Salaries
Tax Payments 50,000.00
Fixed Asset 120,000.00
Outlay
Interest 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00
Payment
Principal 140,000.00
Payment
Total Cash 164,125.00 460,112.50 388,575.00 516,950.00 417,325.00
Disbursements

At the end of September, the cash balance was 60,000. It wants to have a target cash
balance of 70,000.

August September October November December

Cash Receipts 201,250.00 282,500.00 393,750.00 447,500.00 491,250.000
Less: Cash 164,125.00 460,112.50 388,575.00 516,950.00 417,325.00
Disbursements
Net Cash Flow 37,125.00 -177,612.50 5,175.00 -69,450.00 73,925.00
Add: 60,000 65,175.00 -4,275.00
Beginning
Cash
Ending Cash 60,000 65,175.00 -4,275.00 69,650.00
Less: 70,000 70,000 70,000
Minimum Cash
Balance
Required Total -4,825.00 -74,275.00 -1,035.00
Financing
Excess Cash
Balance