Lansing Auto Parts, Inc. has expected sales of $25,000 in October, $35,000 in November, and $30,000 in December. Of company's sales, 20 percent are paid for by cash and 80 percent are sold on credit. Credit sales are collected one month after sale. Find collections for November and December.
Also suppose that company's cash payments for November and December are $30,400 and $29,800, respectively. Starting cash balance in November is $6,000, that is desired minimum balance.
Create the cash budget with borrowing needed or repayments for November and December. Create cash receipts schedule first, then the cash payments schedule before preparing Cash Budget.