CASE STUDY 3 - Cash Budget | | | | | | | | | | | | | | | | | | SCHEDULE OF EXPECTED CASH COLLECTIONS FROM CUSTOMERS: | | | Credit Sales | | | May | June | April | | (94,000 * 0.70) = 65,800 | 65,800 | | May | | (89,500 * 0.30) = 26,850, June (89,500 * 0.70) = 62,650 | 26,850 | 62,650 | June | | (75,000 * 0.30) = 22,500 | | 22,500 | Total Cash Collections | | 92,650 | 85,150 | | | | | | | | | | | SCHEDULE FOR EXPECTED PAYMENTS FOR PURCHASE OF INVENTORY | | | Inventory purchases | | May | June | April | | (195,000 * 0.60 ) = 117,000 | 117,000 | | May | | (135,000 * 0.40) = 54,000, June (135,000 * 0.60) = 81,000 | 54,000 | 81,000 | June | | (63,000 * 0.40) = 25,200 | | 25,200 | Total Payments for Inventory Purchases | 171,000 | 106,200 | | | | | | | | | | | | LBJ Company | | | | Cash Budget | | | | For the Two Months of May and June | | | | | | May | June | Cash balance | | | $20,000 | $20,000 | Add: Receipts | | | | Collections from customers | 92,650 | 85,150 | Sale of plant assets | | 33,000 | | Sale of new common stock | | 50,000 | Cash sales | | | 75,000 | 57,000 | Total receipts | | | 200,650 | 192,150 | Total Available Cash | | 220,650 | 212,150 | Less: Disbursements | | | | Purchases of inventory | | 171,000 | 106,200 | Operating expenses | | 15,000 | 15,000 | Selling and administrative expenses | 10,150 | 10,150 | Equipment purchase | | 35,000 | | Dividends | | | | 20,000 | Total disbursements | | 231,150 | 151,350 | Excess (deficiency of available cash over disbursements) | (10,500) | 60,800 | | | | | | Financing | | | | |