| Bluepanda Inc. sales electronics parts, which finds application in various equipment used mainly in construction industry. The company has faced some issues in managing its working capital and has lost some key suppliers in the recent past due to mismanagement of cash and delay in vendor payments. Bluepanda has hired you as a financial consultant to look into this matter and provide a comprehensive perspective. The management also desired to maintain a cash balance of more than $15,000 each month as financial prudence. After considering all the information provided to you, you decided that having a cash budget would be the first step to understand the shortfall/surplus of cash and will aid in working capital management. You arranged a meeting with the marketing team and gathered the following information: Sales Forecast | Month- year | Sales | | Nov. 2022 | $50,000 | | Dec 2022 | $60,000 | | Jan 2023 | $60,000 | | Feb 2023 | $70,000 | | March 2023 | $75,000 | | April 2023 | $80,000 | The accounts management team provided the following information: 80% of revenue is on a cash basis. 20% is collected after 30 days. Cost of sales, which is 50% of revenue, is incurred in the month in which the sales are made. These goods are paid for 30 (1 month) days after the purchases are made. Monthly selling and administrative expenses are as follows: | Wages | $12,000 | | Financing Cost | $2,500 | | Rental Cost | $800 | | Depreciation | $3,000 | | Communication and Promotion expense | $1,000 | | Provision for future losses | $2,000 | Other budgeted expenses are as follows: Taxes: $10,000 in February, $10,000 in April, and $10,000 in September Purchase of assets: $3,000 in January, $12,000 in February, $20,000 in March, and $3,000 in April Cash balance on January 1, 2023, is $3,000 |
