Panther City has two major sources of revenues, property tax and sales tax, which are...
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Finance
Panther City has two major sources of revenues, property tax and sales tax, which are billed according to the schedule at the top of the next page. Traditionally, property tax revenue have been received in cash according to the following schedule:
30 percent one month following the billing date 20 percent in second month
20 percent in third month
9 percent in fourth month
8 percent in fifth month
6 percent in sixth month
7 percent are not collected
The state collects the sales tax revenues and will transfer cash to the city on March 1, 2018, for the sales tax revenues earned in the last quarter of 2017.
Panther City is not planning any capital asset purchases during the next three months. Monthly cash disbursements for general operations are $3,500,000. Beginning cash balance for January 1, 2018, is $600,000. Panther City will borrow to ensure that the ending cash balance each month is at least $200,000.
Use this information to prepare a monthly cash budget for Panther City for January, February, and March of 2018.
2017
July
Aug.
Sept.
Oct.
Nov.
Dec.
Prop. Tax
50,000,000
Sales Tax
50,000
55,000
62,000
60,000
68,000
112,000
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