Create a cash budget for March using the assumptions
below. Round your calculations to whole numbers (no
decimal places).
• Collections: 55% cash sales, 43% of sales
collected 1 month later, and 2% are written off
as bad debt.
• Inventory purchases: 60% of next month's sales;
75% paid at the time of purchase and 25% paid
one month after purchase.
• Wages: $16,500/month
• Sales Commissions: 10% of collectible sales
paid 1 month after the revenue is earned
• Rent: $3,000/month
• Lease for Office Equipment: $700/month
• Utilities: $300/month
• February ending (and unadjusted) cash =
$14,000
• Minimum cash balance $6,000
Sales for February through April:
February $48,000
March $32,000
April $30,000
Determine whether there is a cash surplus or a deficit
for March.
