(2) Payments for Inventory. Each month they pay 97% of the previous month's purchases. October payment = 97% of Septembe
Friendly Freddie’s – Budgeting Cash Budget – October-December October
November
December
$8,800
$8,600
$9,120
Cash sales
14,000
29,000
44,000
Collections on account (1)
118,200
126,340
134,080
Note receivable
13,000
0
0
Total Cash Receipts
145,200
155,340
178,080
Cash available
154,000
163,940
187,200
(116,400)
(108,640)
(124,160)
(38,000)
(41,000)
(46,000)
(180)
(80)
(154,400)
(149,820)
(174,240)
Cash balance
(400)
14,120
16,960
Bank loan to borrow
9,000
0
0
(5,000)
(4,000)
9,120
12,960
Beginning Cash Balance Receipts:
Disbursements Payment for inventory (2) Operating expenses Interest Disbursements
Bank loan to repay Adjusted cash balance
8,600
Friendly Freddie’s – Budgeting (1) Cash Collected Schedule Sales from
Collected
July
6% of 130,000
August
20% of 104,000
October $
70% of 128,000
20,800 $
6,240
89,600
20% of 128,000
25,600
6% of 128,000 October
December
7,800
6% of 104,000 September
November
$
70% of 135,000
7,860
94,500
20% of 135,000
27,000
November
70% of 142,000
99,400
December
-0-
TOTAL
$118,200
$126,340
$134,080
(2) Payments for Inventory Each month they pay 97% of the previous month’s purchases. October payment = 97% of September’s purchases of $120,000. Paid in October $116,400. November payment = 97% of October’s purchases of $112,000. Paid in November $108,640. December payment = 97% of November’s purchases of $128,000. Paid in December $124,160.
