The Amber Magic Shoppe has forecast its sales revenues and purchases for the last 5 months of 2014 to be as follows: Sales Purchases August $25,000 $17,000 September 15,000 19,500 October 25,000 29,000 November 30,000 20,000 December 26,000 24,000 65% of sales are on credit. On the basis of past experience, 50% of the accounts receivable are collected the month after the sale and the remainder are collected 2 months after the sale. Purchases are paid 30 days after they are incurred. The firm had a cash balance of $5,000 as of September 30th, and its minimum required cash balance is $4,000. It had no beginning loan balance. Prepare a cash budget for October, November and December.
The Amber Magic Shoppe has
Sales Purchases
August $25,000 $17,000
September 15,000 19,500
October 25,000 29,000
November 30,000 20,000
December 26,000 24,000
65% of sales are on credit. On the basis of past experience, 50% of the
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