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Activity based costing.
Roche City has 2 major sources of revenues, property tax and sales tax, which are billed according to the following schedule:
2005
Property Tax
Sales Tax
July
----
50,000
Aug
55,000
Sept
45,000,000
62,000
Oct
Nov
68,000
Dec
112,000
Traditionally, property tax revenues have been received in cash according to the following schedule: 40% one month following the billing date 20% in second month 10% in third month 10% in fourth month 8% in fifth month 5% in sixth month 7% are not collected The state collects the sales tax revenues and will transfer cash to the city on March 1, 2006 for the sales tax revenues earned in the last quarter of 2005. Roche City is not planning any capital asset purchases during the next three months. Monthly cash disbursements for general operations are $3,700,000. Beginning cash balance for January 1, 2006, is $500,000. Roche City will borrow to ensure that the ending cash balance each month is at least $100,000. Use this information to prepare a monthly cash budget for Roche City for Jan, Feb, and March of 2006.
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