Reference no: EM132846181
Question - The following information is provided to assist in the preparation of the Cash Budget for Valerina for March 2021.
The cash balance at 1 March 2021 is $25,000.
Budgeted Sales ($) Budgeted Purchases ($)
October 170,000 64,000
November 140,000 68,000
All sales are collected in the same month the sale is made.
All purchases are made on credit and payments are made as follows:
60% of purchases are paid for in the month of purchase.
40% of purchases are paid for in the month following the purchase.
The business plans to take out a small business loan of $50,000 at the end of March 2021 and will start to repay it back in April 2021.
Selling and administrative expenses each month are $45,000.
The selling and administrative expenses include monthly depreciation expense of $9,000.
The business plan to expand the business by opening a new store in Burwood, VIC, in May 2021.
A rental deposit of $5,600 is to be made in March 2021.
Required - Prepare a cash budget for the month of March 2021.