4. Cash Budget (20 points) The following information pertains to Monroe Company: Month December January...
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4. Cash Budget (20 points) The following information pertains to Monroe Company: Month December January February March Sales Purchases $130,000 $65,000 $68,000 $35,000 $87,000 $46,000 $106,000 $48,000 Cash is collected from customers in the following manner: Month of sale 30% Month following the sale 65% Written off as uncollectible 5% .45% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. Labor costs are 20% of sales. Other operating costs are S42,000 per month (including S8,000 of depreciation). Both of these are paid in the month incurred. The cash balance on January 1 is $6,900. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1.000 at the beginning of the month. Interest on any borrowings is paid when principle is repaid. Repayments in S1,000 increments and interest payments are made at the end of the month with interest charged at a rate of 1% a month. Prepare a cash budget for January, February and March and for the first quarter
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