expects to mas a tax payment of $17,000 in the ned month and a $10000 purchane o
ID: 1172683 • Letter: E
Question
expects to mas a tax payment of $17,000 in the ned month and a $10000 purchane of tued asets in the second month and to recnve $7,000 in cash trom the sale of an asset in the thd month All sales and purchases are tor cash Begringas mm.cash balance are assumed to be zera B Brownteen is unsure of the sales evel, but all other fgures are cetan if the most pessimisic saies fgure is 85.000 per month and the most optmistic erm can sxpect for each of the 1-month penods? $119,000 per month, what ane the moriy minmum and aum nding cash baances tur Erietly decuss how thecal manager can use the dta in parts a and b to ien or tnancing needs a Construct a cash budget for the nevit 3 months Sale of asset nages and saanesExplanation / Answer
Cash budget
Month
1
2
3
sales
99000
99000
99000
sale of asset
7000
purchases
-56000
-56000
-56000
wages and salaries
-23940
-23940
-23940
taxes
-17000
purchase of assets
-10000
net cash flow
2060
9060
26060
add beginning cash balance
0
2060
11120
year end cash balance
2060
11120
37180
Cash budget
Month
1
2
3
sales
99000
99000
99000
sale of asset
7000
purchases
-56000
-56000
-56000
wages and salaries
-23940
-23940
-23940
taxes
-17000
purchase of assets
-10000
net cash flow
2060
9060
26060
add beginning cash balance
0
2060
11120
year end cash balance
2060
11120
37180
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