LingLing Auto Parts, a family-owned auto parts store, began January with $11,000

Question

LingLing Auto Parts, a family-owned auto parts store, began January with $11,000 cash. Management forecasts that collections from credit customers will be $11,600 in January and $14,700 in February. The store is scheduled to receive $6,000 cash on a business note receivable in January. Projected cash payments include inventory purchases ($14,100 in January and $13,300 in February) and selling and administrative expenses ($3,000 each month).

1.

2.

Ling Auto Parts

Cash Budget

January and February

January

February

Cash available

Cash payments:

Total cash payments

Less:

Ending cash balance

1.

Prepare LingLing Auto Parts's cash budget for January
and February.

2.

How much cash will LingLing Auto Parts borrow in February
if collections from customers that month total $13,700
instead of 0$14,700?

Ling Auto Parts

Cash Budget

January and February

January

February

Cash available

Cash payments:

Total cash payments

Less:

Ending cash balance

Explanation / Answer

Answer:-1)-

2)-

LingLing Auto Parts Cash Budget Particluars January February $ $ Opening Cash 11000 11500 Cash Collection:- Collection from credit customers 11600 14700 Business note receiviable 6000 0 Total cash available (A) 28600 26200 Cash Payments:- Inventory purchases 14100 13300 Administrative expenses 3000 3000 Total cash payments (B) 17100 16300 Closing Cash C= A-B 11500 9900

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